BIG INTERVIEW
Connecting the
business products world
Craig Bartholomew, 360 Office Solutions & Pinnacle Affiliates
February 2017
A Family Business Born and Built in Chicago-1917
INSIDE THIS ISSUE l l
2017 trends l Depot Europe sale closes l Alibaba’s OP relevance l Paperworld interview l Fellowes celebrates 100 years Office technology – category update l Logistics in Australia: spotlight on Lectronic l State of the OP Industry report 2016/17
CONTENTS 16 Big Interview Craig Bartholomew on the importance for dealers to ramp up scale 23 Hot Topic What inroads has Alibaba made since its launch? Is it a force in our industry? 27 Category Update With plenty of trends and potential growth areas, the writing instruments sector is alive and well 33 Category Update The office technology category can be a mixed bag, depending on where you look 38 Vendor Profile Fellowes celebrates 100 years in business 45 How to... ...make the right web design choices for Google Analytics 51 Spotlight A look at Lectronic’s unique business model in Australia
Big Interview: Craig Bartholomew 360 Office Solutions
Always beating the dealer drum, Craig Bartholomew talks to OPI’s Heike Dieckmann about the importance of scale, relevance and best practice sharing – at his own company as well as Pinnacle Affiliates, the US group for large dealers HOT TOPIC: ALIBABA – THE SLEEPING CHINESE DRAGON?
57 OPI Partnership 2017 Europe’s manufacturers and resellers come together for strategic meetings 58 European Office Products Awards 2017 Who’s in the running to win an EOPA this year? 62 Research A preview of The State of the OP Industry Report 2016-17
REGULARS 5 Comment 6 News 64 5 minutes with... Gordon Christiansen 66 Final Word Arnold Theuws
February 2017
If office products suppliers are looking to break into the Chinese consumer market, they must think very hard about product selection. What is it about their product(s) that is unique and is it something that the Chinese consumer would normally be unable to find in their home market? Chinese consumers are looking for products that are high quality and represent the heritage/ culture of the country they are buying them from
54 Interview OPI talks to Paperworld Director Michael Reichhold
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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 News Editor Domenic Donatantonio +44 (0)20 7841 2952 domenic@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
EVENTS
Events Manager Lisa Haywood +44 (0)20 7841 2941 events@opi.net
PRODUCTION & FINANCE Studio Joel Mitchell +44 (0)20 7841 2943 joel.mitchell@opi.net Operations & Production Eda Sismanoglu +44 (0)20 7841 2950 eda@opi.net Finance Kelly Hilleard +44 (0)20 7841 2956 kelly.hilleard@opi.net
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Connecting the
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t’s the perennial question at the beginning of the year: what will the coming year hold for the business supplies industry? New OPI News Editor Domenic Donatantonio – and let me take this opportunity to welcome Domenic to the OPI team and introduce him to our readership – has been asking that very question. The answers were mixed and varied (see page 6), but the thread running through many of them is the increasing digitisation that is expected to impact all parts of our industry. Indeed, looking at this issue of OPI, it’s clear that ‘online’ is an omnipresent theme. Craig Bartholomew from 360 Office Solutions says in our Big Interview this month that “it’s an internet world” (see page 16). And if that’s true in the relatively rural and remote market of Montana, it’s fairly indicative of what’s happening elsewhere and what lies ahead. Amazon, of course – for better or worse (see also our Final Word on page 66) – is always at the heart of every ‘online’ discussion. But what about Alibaba, the Chinese e-commerce operator often hailed as the next Amazon? Is it actually having an impact on our space? Find out on page 23.
Amazon is always at the heart of every ‘online’ discussion. But what about Alibaba, [...] often hailed as the next Amazon? Our two Category Updates this month (see pages 27 and 33) also refer to a blurring of the lines between the analogue and the digital, both in terms of end users’ overall digital journey as well as specific products. Just take the office technology segment: is there anything with a plug that doesn’t double up as a charging point for mobile devices? I’ve just found a tea and coffee maker with a USB charging port (and alarm clock) which looks fabulous. A hand dryer in the washroom? Both would also tie in nicely with our industry’s ever-growing focus on the facilities supplies category. (Semi) joke aside, take a look at pages 60 and 61 to see what new product innovations are on the market as part of this year’s European Office Products Awards (EOPA) shortlist. The winners of all 14 award categories will be announced during the annual EOPA presentation dinner, which this year again takes place in Amsterdam as part of OPI’s Partnership event. Tickets for the dinner – not for Partnership – are still available, so get in touch if you don’t want to miss this special event. By the time most of you read this issue of OPI, the annual pilgrimage to Paperworld in Frankfurt will be over once more, but hopefully you will all come back with an updated and extended contact book and plenty of ideas and inspiration of how to improve your business – on and offline. Until next month... HEIKE DIECKMANN, EDITOR
February 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.
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It’s an internet world…
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Analysis: What’s in store for 2017?
OPI asked some of the key figures in the industry about their thoughts for 2017 after the turbulent past 12 months
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The industry is set for another year of increased web-based business, with more focus on automated sales advice. Naturally, online behemoth Amazon will cast its long shadow over the industry too. Indeed, the ongoing impact of Amazon was one of the most prevalent responses when OPI polled industry peers about the key issues of 2017. With these forecasts in mind, BOSS CEO Philip Lawson urged the sector to return back to the forefront of online sales innovation in 2017. He said: “Buying online will accelerate. Smart online suppliers will turn a self-service model into automated sales advice. Online chat will grow too, but automated intelligence will grow faster. We were once at the forefront of online sales as an industry [and] we can keep up, but we need to invest.” ADVEO Chief Product Marketing Officer Ronny Van Rossem sees the impact of online sales as potentially driving the industry to find a new business focus. He believes that digitisation and consolidation will be the two key topics of the year: “Not only will a company like Amazon continue to be disruptive and push companies to rethink their proposition, digitisation will continue to impact substantially the volume as well as the type of products that will be bought by consumers.” He added: “This will also continue the discussion as to how we talk about the office products industry. Should we be looking at a new name like office solutions or office business solutions?” Guernsey CEO David Guernsey in the US views 2017 as a year of “tremendous change” for all the traditional resellers of core categories like office products, jan/san and breakroom. He said: “New competitors, most notably Amazon, and end consumers – and not just millennials – have already rewritten the rules. This isn’t what is coming, it is what’s here. We resellers are mostly in a mode of catch-up. Customers lost or, at best, sales leakage, leads to declining order sizes and delivery expectations that border on the absurd.
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“Do resellers understand why and, more importantly, what to do about it? Independents typically have two key partners in, or tangential to, the supply chain – wholesalers and dealer groups. I would argue that both of these key partners are just as vulnerable to the new reality as their dealers. This begs the question: how are all of these folks working together to implement the needed change?” Source Office & Technology CEO John Givens takes a similar view, predicting that the more resourceful dealers will continue to find avenues of revenue growth outside the traditional markets of office coffee services, printers and copiers, and business furniture, to instead grapple with new business processes, technology integration and go-to market strategies.
New competitors, most notably Amazon, and end consumers – and not just millennials – have already rewritten the rules Givens suggests that smaller legacy office supplies businesses will have to consider major reinvestment strategies or join with larger progressives that have the depth of management, systems support and capital investment needed. Gavin Ward, CEO of Australian dealer group Office Brands, takes a forthright view of fortunes in the coming year, firstly highlighting the fact that traditional core markets are in decline. He added: “Amazon is of major interest for everyone – how do we deal with them as they enter our market? Are they friend or foe?” Ward also calls for a renewed focus on the unique points of difference of buying groups/franchise models around the world, a look at how they approach their markets and how they are working to improve their capabilities and spread investment. This view is shared by GOJO Industries Commercial Sales Director Bill Cardone who questions whether the US buying groups will struggle to remain relevant, and whether manufacturers will re-evaluate how they use sales representatives. In the UK market, Westcoast Managing Director Alex Tatham warned of more price increases as the US dollar strengthens leading dollar-nominated businesses to increase their prices in the UK pound sterling currency.
IN BRIEF Pinnacle adds new members US dealer group Pinnacle Affiliates has welcomed three new members to its portfolio – Mybinding.com, Sandia Office Supply and Office Plus of Kansas – bringing the total number of members to 33. Sandia Office Supply and Mybinding.com both left TriMega to join Pinnacle, while Office Plus joined from dealer group Independent Stationers. TriMega looking to build on strong 2016 US office products dealer group TriMega has said it closed 2016 on a good financial footing. According to the buying group, the solid finish is partly due to reducing operating expenses by more than 30% over the past four years. TriMega said it also added 20 new members over the past year. Mac Papers opens new demo centre US regional paper distributor Mac Papers has launched a new wide format demonstration centre at its headquarters in Jacksonville, Florida. The demo facility aims to provide customers with knowledge of machine features, print techniques, technical components and end-user applications. Independent Stationers plans for growth US dealer group Independent Stationers (IS) has revealed details of its 2016 achievements. IS said that 32 new dealers joined the group last year, along with more than 20 new vendors, the majority from the facility supplies categories.
Staples buyout on track At the time of going to press, Hilco’s takeover of Staples’ UK retail business is set to make its end of January completion date. In an email to Staples Rewards customers just prior to the December holiday period, the reseller confirmed that from 29 January, Staples UK retail operations will be rebranded and trading under the new ownership of Hilco Capital. Consequently, its Rewards programme closed at the end of last year. The email reaffirmed the disappearance of the Staples name from the UK retail channel as the brand is not included in the deal. The statement also suggested that the store network will be operated as a going concern, at least for the foreseeable future.
Meanwhile, Mike Ayckbourn has joined the reseller from Newell Brands to take up the role of EMEA Category Director. He will report to Sharon Tan, Staples’ new Head of Merchandising Europe. Tan replaced Thomas Nowak who decided to leave the firm last December to pursue other interests.
Revamped BPGI looking to the future
Independent dealer purchasing organisation BPGI has announced that Netherlands-based wholesaling and reseller group Quantore is rejoining the consortium following its two-year membership of the Interaction group. Quantore Managing Director Arnold Theuws commented the fit with Interaction was “good”, but admitted that it “wasn’t optimal”. The group has changed its strategy on private label and Theuws said the focus is now “more on quality and packaging than on price”. He told OPI: “A key difference for Quantore versus 2014 [when it announced it was leaving BPGI] is that BPGI is creating an environment which recognises working more closely with the other stock-keeping members within the group. Our expectation is that this will allow us to work more closely with like-minded organisations and have more relevant conversations with the vendors.” With no North American members in BPGI anymore and the Australian/New Zealand groups forming their own purchasing agreement – although Office Brands has also stayed in BPGI – Europe is now its focus. BPGI is now a registered LLP in the UK and has developed an outsourcing arrangement with UK dealer group Integra for various purchasing, administrative and finance functions. BPGI CEO Barrie Hayes told OPI: “We are adapting what we do for the relevant membership structure, for example with the members that have their own warehouses and distribution. “While pricing is still important, that also means things such as intertrading, looking at buying deals, some private label possibilities and the sharing of best practices.” BPGI acknowledged that it wouldn’t be able to exist without support from its vendor partners. Vendor negotiations that took place in France recently related to contracts for 2018 and 2019. That relevance will remain as long as the printed catalogue refuses to be killed off. Catalogues are under pressure, but BPGI dealers still distributed about 550,000 of them for the start of 2017. So despite fears a couple of years ago about whether BPGI had a future, Hayes remains bullish, saying that “the curve has turned”.
Estimated worth of the Internet of Things market in the US in 2020
$500 million
$29bn Estimated ima e worldwide pend nding g on 3D spending nting ting i g iin 2 printing 2020
February 2017
ALSO acquires in France European technology distributor ALSO has acquired BeIP, a France-based specialist network and security distributor. BeIP offers IT technologies and related support services across France and Africa. It expects 2016 sales to hit almost €20 million ($21 million).
NEWS
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Paper-based mail still key EDM Group research has found that significant numbers of UK companies are still managing large volumes of mail despite the rise of digital technology. According to the information management firm, 23% of businesses handle more than 5,000 items of inbound mail every month. The same percentage receives between 2,000 and 5,000 items a month. The survey also found that 19% of firms operate fully-automated digital mailrooms, but only 3% of companies use them across all of their locations. Blake opens new hub UK postal packaging vendor Blake has opened its second ‘hub of excellence’ in Leeds. This follows the opening of its first hub in Edinburgh in October last year. Codex secures data security certification Ireland-based reseller Codex has achieved a data management certification after a review of its digital platforms. The firm has secured the ISO27001 credentials after an internal assessment to ensure a secure exchange of information throughout the business. ISSA appoints manager for Oceania region Cleaning industry association ISSA has appointed Kim Taranto as its new Oceania Manager. She will focus initially on building ISSA’s national Australian business. Bunzl purchases two firms Facilities supplies and services group Bunzl has acquired two more businesses – UK-based packaging products firm Woodway, and Packaging Film Sales, based in Denver, Colorado.
@binary_people What’s your best office life hack? #programmerlife #startup #startupaus #digital #jobs #programmer #office #lifehack #officelife @uniball_uk Are you more of a #diary or #calendar type of person? #Organised #NYResolutions
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Depot Europe sale completed Office Depot has completed the sale of its European business to the Aurelius Group. The transaction is part of the company’s recently announced strategy to focus solely on opportunities in its North American business. In Europe, Office Depot operated in 14 countries, employed around 6,500 people and had annual sales of €2 billion ($2.14 billion). The sale had been structured as an equity sale, with Aurelius acquiring the entire European business, including its assets and liabilities, for a “nominal consideration”, although the UK pension liability is not included. Munich, Germany-listed Aurelius currently has a portfolio of 25 companies in a diverse range of industries, the best known one probably footwear brand Scholl.
(5%)
(26%)
OPI.NET POLL RESULTS
(37%)
(32%)
What’s your outlook for the OP industry in 2017?
FLAT POSITIVE NEGATIVE THE BEST YEAR YET
February 2017
Fellowes secures patent Fellowes has been granted a patent protecting new technology that improves the automatic paper delivery process for hands-free shredding.
BEST IN APP
NEWS
BIRD FEED
IN BRIEF
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NEWS
Analysis: French B2B resellers join forces to combat Amazon
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A virtual B2B marketplace called Agoply has launched in France to combat the expected arrival of Amazon Business in the country this year. Agoply – the name is derived from ‘Agora’, Greek for a commercial or political meeting place and the word ‘supply’ – was first discussed about two years ago during a meeting of the Club B2B, an informal think tank of some of France’s leading B2B players such as Companeo, Legallais, Otelo, Conrad, Haleco, Bruneau and Securimed. Industrial supplies distributor Otelo CEO Yvon Charles is credited with first mooting the idea of a joint marketplace. He said: “Up against the international e-commerce ‘giants’, it was becoming increasingly important for French e-commerce resellers to have another online option.” The concept was then taken up by Jean-Louis Coustenoble, former Managing Director of Staples’ JPG and Bernard direct brands in France. He received the backing of three of the Club B2B members who invested in the creation of a company called Colecoo which runs the Agoply platform. Coustenoble told OPI: “The most challenging aspect has been building the back office and integrating with the different systems of our participating merchants so that we can ‘push’ hundreds of thousands of products onto the platform.”
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CONSOLIDATED PURCHASING The Agoply platform has brought together the product offerings of multiple B2B e-commerce resellers into a single website. Customers can buy products from different vendors, but they only receive one invoice per order from Agoply regardless of how many suppliers they have ordered from. Orders are automatically transferred from the Agoply platform to each merchant’s own e-commerce system and the merchant then processes the order and despatches the goods as it would do with orders received directly through its own website. One potential sticking point with customers may be delivery costs. Agoply does not have its own distribution infrastructure, so participating merchants handle all deliveries. At the moment, each merchant applies its own minimum order threshold to qualify for free delivery. Therefore, if a customer places an order with several suppliers, but does not exceed minimum order thresholds, then the customer will be hit with multiple delivery charges. This is an area that Coustenoble says he is working on, and he is looking at a customer membership scheme – similar to Amazon Premium (known as Prime outside of France) – that will include free delivery. Agoply purchases products at negotiated prices from its reseller merchants and then sells them to end users. This enables the marketplace to be the sole supplier for orders placed on the site, meaning customers can have a single invoice, so Agoply makes its money on the gross margin differential. The customer is therefore technically ‘owned’ by
Agoply, but Coustenoble says that merchants are free to put their own advertising and promotional materials in with their deliveries. He said: “There may be certain customer types that the resellers can better service themselves. Our goal is to keep customers that have different purchasing needs throughout the year and don’t need multiple supplier accounts.”
Up against the international e-commerce ‘giants’, it was becoming increasingly important for French e-commerce resellers to have another online option Coustenoble’s ambition is for Agoply to develop in other markets outside France. He concluded: “If everything goes well, we hope to be able to expand internationally within two years.”
Jean-Louis Coustenoble
Paper merchant Antalis has recently announced the acquisitions of Swan Paper, Gregersen and TFM Industrial. Swan Paper is an Ireland-based paper distributor, while Gregersen is a distributor of visual communication equipment in Norway. This follows the purchase last November of TFM Industrial, a Peru-based distributor of packaging products. Antalis COO HervĂŠ Poncin said the acquisitions will contribute additional full-year sales of around â‚Ź24 million ($25 million).
NEWS
Antalis makes three acquisitions
L-R: Swan Paper Ireland CEO Brian McArdle, Antalis Ireland Managing Director Eoin Heagney and outgoing CEO Tony Swan
US federal government reopens Schedule 75 plans The General Services Administration (GSA) has called for industry feedback on plans to reopen an acquisition vehicle for office products and supplies. The GSA plans to re-open Multiple Award Schedule (MAS) 75 Office Products and Supplies with a Request for Information (RFI). The move followed several months of discussions between the GSA, the vendor community, and industry stakeholders to determine the future direction of MAS 75. Historically, in order to sell to federal agencies, resellers needed to possess a MAS, but the US government decided to let the contracts wind down in 2010.
$22 bn Estimated worth of the global writing instruments market by 2019 9
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February 2017
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NEWS
WHO’S WHO IN OP
Top 100 new entry: Frank van Zanten, CEO, Bunzl Frank van Zanten was appointed CEO of Bunzl in April 2016 following more than ten years as Managing Director of the company’s Continental Europe business and time spent as CEO of PontMeyer beforehand (2002-2005), a company based in the Netherlands. He first joined Bunzl in 1994 when his family-owned business in the Netherlands was acquired, and subsequently assumed responsibility for several businesses in a number of other countries. Looking forward, van Zanten will focus on further expansion of the group, continuing investments in IT and digital projects, and intensifying the sharing of best practice.
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Buffetti driving engagement via smartphone app
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Italian OP franchise group Gruppo Buffetti has reported impressive results with its bespoke app and Facebook group. General Manager Francesco Villa told OPI at last November’s Big Buyer show in Italy that the firm is seeing a high level of engagement with these tools. Buffetti has trialled the training and development app based on ‘gamification’, which aims to lighten potentially tedious tasks by adding a fun, possibly competitive, element. The game via the app features a short video on a particular topic such as a new product, selling technique or marketing action. Users have two days to answer questions, with weekly and monthly prizes and an overall winner at the end of the competition, which lasts for six months. Villa said around 500 people normally take part, which represents about a third of the people working in franchise its network, a high level of engagement compared to click-through rates from email campaigns. Buffetti has seen even better results on Facebook, where it created a private group for its franchise partners to ask questions, share ideas and even criticise the company. Villa said: “Criticism is good. It helps us to understand areas we need to work on. But more importantly, we are building a new way of interacting with our franchisees and it is proving to be extremely effective – the group members are very active and like to highlight their achievements with each other.” The Facebook experience also extends to a weekly live event such as a video or sometimes even a presentation by Villa himself. Invitations to the Facebook events are sent out about 24 hours in advance, with as many as 120 people following live. The number of views generally climbs to around 1,000 in the following couple of days, about two-thirds of the network. Villa said that one week he did a ‘Black Friday’ special, offering all those who were following live a 10% discount on orders they placed during the session. As a result, €100,000 ($104,000) worth of orders were taken in just two minutes. Costs related to the app and Facebook are “minimal”, said Villa, with one person working part-time to manage the online group.
US Postal Service ends Staples contract Staples has had its partnership terminated with the US Postal Service (USPS). The move was announced by the American Postal Workers Union (APWU) which said it had been informed by the USPS of the decision to end its postal services contract with Staples. The contract will terminate at the end of this month. Staples told OPI: “We’ve been notified by the US Postal Service that it plans to cancel the Approved Shipper programme from 500 of our stores. Our customers will continue to have access to shipping services through our relationship with UPS.” Staples will now remove all USPS signage from its stores and discontinue USPS services by the first week of March, according to the union.
Research firm Gartner has projected worldwide IT spending to total $3.5 trillion in 2017, a 2.7% increase from 2016. However, this growth rate is down from earlier projections of 3%. Worldwide devices spending on the other hand – meaning PCs, tablets, ultramobiles and mobile phones – is projected to remain flat in 2017 at $589 billion. That said, a replacement cycle in the PC market and strong pricing and functionality of premium ultramobiles will help drive further growth in 2018. The worldwide IT services market, meanwhile, is forecast to grow 4.2% this year. Buyer investments in digital businesses, intelligent automation, and services optimisation and innovation continue to drive growth in the market, although buyer caution, fuelled by broad economic challenges, remains a counterbalance to even faster growth.
Good H1 for Askul
Japanese business supplies reseller Askul continued to make progress on its e-commerce, logistics and category expansion initiatives during the first half of its financial year. While the Japanese economy remained pretty flat in the six months to the end of November 2016, local powerhouse Askul reported H1 sales growth of more than 10% to around ¥165 billion ($1.4 billion), driven by adjacent categories in its B2B segment such as MRO, cleaning and breakroom (which Askul calls ‘living supplies’) and medical supplies. Taken together, sales of MRO and medical supplies were up more than 14% year on year to over ¥27 billion and they now represent almost 20% of the company’s B2B sales. Cleaning and breakroom products also grew in the strong double digits – although this included sales on the LOHACO B2C platform – and there was low-to-mid single-digit growth in the other main product categories of office automation and technology, stationery and office furniture.
NEWS
Worldwide IT spending tipped to grow
February 2017 13
Sizing
BIG INTERVIEW
IT UP
Always beating the dealer drum, 360 Office Solutions CEO Craig Bartholomew talks to OPI’s Heike Dieckmann about the importance of scale, relevance and best practice sharing
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ver since he joined the OP industry, Craig Bartholomew has been heavily involved in the US independent dealer community. Starting with his own dealership 360 Office Solutions, he soon became involved in buying group Independent Stationers (IS) and in 2009 with Pinnacle Affiliates, the dealer group for the biggest independent OP operators in the country. Bartholomew recently completed his two-year stint as Chairman of Pinnacle. From his new backseat perspective – though he’s still on the board of the group for another year – he talks about his own dealership, the creation and rise of Pinnacle and the importance of size in today’s business supplies industry.
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OPI: Please tell me about your career path. What led you to work in office products? Craig Bartholomew: I’m an accountant by trade and have a Masters in Tax from the University of Utah. Before joining the OP industry about 15 years ago, I worked for three years as Controller and Principal Accounting Officer for an independent power producer in Montana called PPL. Prior to that I was with KPMG for seven years. So overall, I’m good with numbers!
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OPI: I guess when you became part of 360 Office Solutions in 2002, the numbers looked a bit different from today… What is the history and set-up of the company? CB: Yes, they were different. The precursor to what is now 360 was a company called Reporter Printing which was founded in 1941. In the 1970s the firm got out of the printing business and continued in office products and furniture. Over time, the name changed to Reporter Office Products – that was the company name when I bought it nearly 15 years ago. Back then, we were basically a Billings, Montana-based OP and contract furniture company. Since then, we have done 11 acquisitions in the area, which allowed us to become a Ricoh and Kyocera dealer along with expansion into the breakroom and
facility supplies business. For a time, our overall branding strategy wasn’t very cohesive and we had all sorts of different names, but about four years ago we went through a rebranding exercise and came up with the name 360 Office Solutions. Our tag line is to provide ‘smart answers everywhere you turn’. I have four business partners. One is the youngest son of the family who started the business back in 1941 – he is in charge of the contract furniture division. Another partner runs the business machines division of the company. Then I have a partner in one of our Helena – the state capital of Montana – locations. In essence, I run the business operations and finances overall, while my partners oversee different sales disciplines within the company. OPI: How is 360 Office Solutions looking today, from a revenue, staff and location perspective? CB: We were just under $30 million in sales last year and have approximately 130 staff. About 70 to 80 people are here in Billings – that’s our biggest market. Then we have another 50 or so staff in various
BIG INTERVIEW Craig Bartholomew
other locations in the state, including in the cities of Bozeman, Butte and Helena. OPI: So your overall geographic coverage is mainly the state of Montana? CB: For OP, our mainstay is Montana and we drop-ship to customers outside the state. From a contract furniture perspective we also go into North and South Dakota, Wyoming and occasionally Idaho. In terms of business machines, that’s pretty much Wyoming and Montana. End to end, we cover an 800-mile radius.
It’s a real cliché, but I truly believe that we can never win unless our employees really support the value and the vision that we have for this company. If you don’t all pull in the same direction, you have no hope of going anywhere, so that’s definitely our number one initiative this year. I’ve found this is actually one of the hardest jobs in a company. It’s particularly challenging because we’re geographically dispersed, so I can’t just walk around one building, talk to people and be visible all the time. I frequently travel to all our locations, listen to employees and talk to them. It can be very rewarding but also very frustrating at times. 360 Office Solutions is an acquisitive company and we need to make sure that we buy the right
February 2017
OPI: What was 2016 all about for you and what are your plans for this year? CB: We have continued to do a lot of work on our core values and we had some success with that, but with four acquisitions last year we took a few steps backwards. One of our key objectives for this year is to re-engage the value proposition that this company offers and getting that really ingrained with the employees that came on with these acquisitions.
If you don’t all pull in the same direction, you have no hope of going anywhere
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BIG INTERVIEW Craig Bartholomew
companies with the right people that believe in our values. The markets here in Montana still have a very strong relationship-based culture and we need to foster this culture through our acquisitions. OPI: What type of companies have you bought? CB: All of them expanded out of our existing capabilities. We’ve always been a contract furniture company, so we grew from that and now support all manufacturer lines we have with our installers and design crew. In the machines business, like I said before, the acquisitions have allowed us to be both a Ricoh and Kyocera dealer. We last year picked up a copier contract for the state of Montana and recently completed the roll-out of the first wave of 300 copiers. What was attractive about the acquisitions we made was that they were stable, long-standing and well-respected businesses. We still have to get deeper into adjacencies like breakroom or facilities supplies. And maybe some straightforward office products dealers if they’re in our existing geography and if there are synergies to be had in pairing up. I don’t think there’s much point in going further afield for a pure office products player. OPI: How are your overall revenues spread out over the various divisions? CB: Traditional OP now accounts for less than 40% of sales. Breakroom and facilities supplies are a growing category for us and are in the 5-9% sales range currently. The copier/machines business is about 30% while contract furniture is just over 20%. It’s a fairly well-spread mix.
OPI: You mention Staples and Depot. Are they invading your space in their effort to move further down into the mid-market? CB: Nothing has really changed – they’ve always been here, but haven’t made any real headway from what I can see, with the exception of taking more online sales. We’re on the OP state contract with Staples and Depot, of course, so we compete with them in that way as well.
In the current business environment [...] you need to build size to maintain your relevance OPI: Who’s your first call wholesaler? CB: Essendant. OPI: Before we move on to Pinnacle Affiliates, where do you see the company in a few years? CB: We’re going to continue to push in order to grow, with expansion into new territories as well as acquisitions. If you’re not growing you’re going backwards. In the current business environment I also believe that you need to build size to maintain your relevance. OPI: Let’s talk Pinnacle – what’s 360’s involvement with the group? For a start, when did you join? CB: We joined Pinnacle as its 16th member and that was about seven years ago. We were previously a member of IS where I was also treasurer for some time and eventually chairman for several years.
February 2017
OPI: Tell me about your competitive landscape. CB: It’s an internet world. OP-wise, Amazon is a competitor, though mostly on the B2C side at the moment. We have a lot of small firms in our area and many of them are Amazon customers, so we definitely see that influence. Staples’ and Office Depot’s online business is also a factor.
In terms of other small independents, there are only a few in our region, so we’re well positioned in that regard. In the furniture business, we’re competing with other small contract furniture houses; the same applies to the machines business – lots of very small copier businesses.
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OPI: What made you join? You can only just have passed that $20 million threshold at the time… CB: Pinnacle was founded in July 2008 by Kevin Johnson from Warehouse Direct, David Guernsey from Guernsey and Mark Miller from Eakes Office Plus. This is a group of extremely intelligent dealers who had a vision of what large dealers need to be successful. I was actually on the board of IS at the time, but I saw what they were doing and thought that, if we’re going to be a survivor in this industry, we had to grow and join that group. I don’t even remember our size back then, but it was something we wanted to drive towards. Through acquisitions and organic growth we qualified for the direct buy requirement initially which is $3 million. The most appealing aspect for me of this group was – and still is – to learn from my peers and these highly intelligent people. Just as an example, we hadn’t broken into the breakroom category when we joined, but listening to Dave [Guernsey] talking about his breakroom programme, his approach, catalogue, pricing, etc, was a real eye opener. Of course we had to rationalise it for our own market, because he’s in DC and we’re in Montana, but that best practice sharing allowed us to move a lot faster than if we had had to do that groundwork ourselves.
Pinnacle Affiliates aims to be a low-cost model, that drives manufacturer and dealer collaboration. What we do is spend a lot of time talking to our fellow members and then use that knowledge to make our own dealerships better. OPI: What about purchasing power? CB: Of course you get the purchasing power that comes with those combined revenues. We also need to continue to drive a high level of compliance among Pinnacle dealers, benchmark how we are doing, support our vendor programmes and always want to improve on what we do. OPI: Is there a cap in terms of how big you want to grow Pinnacle? You’ve just added three more dealers and now stand at 33 I believe? CB: That’s correct. We want dealers that are market leaders, forward thinking and realise the need to work together with fellow dealers and manufacturers to strengthen the dealer community. There’s no limit in terms of numbers, but let’s not forget that the group doesn’t suit everyone. Not all dealers understand or agree on the pillars of what we do and how we operate.
BIG INTERVIEW Craig Bartholomew
OPI: Given your size of about $30 million, are you a ‘typical’ Pinnacle dealer? I believe some of the other members are substantially larger. CB: A Pinnacle member has to be over $20 million, so we fit the bill but we’re definitely one of the smaller members. And you’re right, there are some very large dealers within Pinnacle in the big metropolitan areas of the country, like Washington DC, Chicago, Los Angeles, Seattle, etc.
OPI: Before Pinnacle, you were very involved with IS, as you mentioned before. I believe there continues to be a relationship between the two? CB: Yes – and it’s a very good relationship. Pinnacle has a back-end office support agreement with IS whereby the group does rebate collection from the manufacturers, for example. Pinnacle members have the ability to be part of the various IS offerings like the national accounts or federal sales programmes. We also work in a collaborative way with IS when it comes to merchandising and some IT initiatives. Additionally, many of our members are part of AOPD and successfully use the programmes the network offers – it does a good job. With all that said, Pinnacle has its own initiatives and objectives. We need to stay focused on these because in the end we should never lose focus of what’s best for the dealers of Pinnacle.
For more exclusive content from the interview such as the evolving role of the wholesalers, TriMega/IS merger talks and Staples/Depot retreating back to their US home soil, please visit opi.net.
February 2017
OPI: To finish up, after two years as Chairman, are you happy with what’s been achieved in your time? CB: We’ve done ok. But it’s important not to lose sight of the hard work that was done to form Pinnacle. Kevin, Mark and Dave are the ones that deserve the credit for the success we have today. They put tonnes of stuff in place that allowed us to continue to be successful. I didn’t mess it up and that’s a good thing. We continued to grow and add members. But there’s plenty more to do: we need to add a little more structure and our vision will continue to be refined. I have one more year on the board of Pinnacle and then it’ll be time for someone else to step up and be involved. All the members of Pinnacle have the opportunity to impact the direction of the group – as they should. Because in the end, it’s all about them.
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HOT TOPIC
While the OP industry has been focused on Amazon, the world’s largest e-commerce company, Alibaba, has been working quietly behind the scenes preparing its international business. Michelle Sturman reports...
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he writing of this Hot Topic coincided with Jack Ma, lead founder and Executive Chairman of China-based e-commerce giant Alibaba Group, meeting with then US President-elect Donald Trump at the beginning of January 2017. Even though Trump has in the not-too-distant past seemingly been quite “threatening” towards China in terms of renegotiating trade deals, Ma pledged to create one million jobs in the US over the next few years by encouraging small businesses to sell on its online marketplace platform(s), in particular to Chinese customers. China offers a young and growing middle class of around 300 million that is increasingly looking to buy international brands, and it is estimated there is around $4.6 trillion in cash reserves across Chinese households. Furthermore, by 2020, cross-border e-commerce sales in China are expected to reach more than $150 billion. From Ma’s point of view, the announcement is just one vital component in his vision of making Alibaba
ALIBABA GROUP’S KEY BUSINESSES
HOW DOES ALIBABA WORK? Outside of China, the company is confusing to many. Is it like Amazon, eBay, PayPal, or something else entirely? Put simply, Alibaba Group is an internet business that provides the technology to facilitate the sale of goods between merchants, brands, small businesses and consumers globally through different online marketplaces. What Alibaba does not do is sell its own products, have its own warehouses or own a logistics infrastructure. Instead, it uses its software expertise to create an ecosystem that includes e-commerce platforms, cloud computing, digital media and entertainment, payments and financial services, and logistics. It’s important to understand that Alibaba Group hosts many different platforms aimed at very specific audiences (see ‘Alibaba Group’s key businesses’, left, for more information). For the purpose of this article, OPI will concentrate on Alibaba.com – probably the most well-known platform – which is the company’s B2B marketplace where international small businesses
Jack Ma
February 2017
Alibaba.com: B2B platform for small businesses – www.alibaba.com Tmall/Tmall Global: Third-party platform for brands and retailers – www.tmall.com Taobao Marketplace: C2C shopping platform – www.taobao.com AliExpress: Global marketplace for consumers to buy from China – www.aliexpress.com Juhuasuan: Online group buying marketplace – www.juhuasuan.com Alibaba Cloud: Cloud computing services – www.aliyun.com
truly international. Figures suggest that Alibaba has already surpassed Walmart to become the world’s biggest retailer although it doesn’t actually sell anything. However, the company is bridging the gap between online-to-offline after making investments in physical retail stores. It recently bought the Intime department store chain for $2.6 billion, and a percentage of Sanjiang Shopping Club – similar to Walmart’s Sam’s Club – for around $300 million, among others.
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Alibaba HOT TOPIC
trade directly with each other, and with Chinese manufacturers. The other platform worth investigating is Tmall, including Tmall Global, a platform for brands and retailers (B2C) which is a spin-off from its original C2C platform Taobao. Asking senior members of the industry, OPI found that while everyone had heard of Alibaba, a large percentage professed to know little about it; others said their focus was most definitely on dealing with Amazon and not the Chinese e-commerce giant. A recent opi.net poll on Alibaba (see below) found that no respondents from the industry are currently using Alibaba to generate sales, although over 40% had intentions of doing so in the future. This sentiment was echoed in OPI’s Q4 OP Confidence Survey, which asked participants
www.opi.net
ALIBABA MILESTONES
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1999: Alibaba Group is established by its 18 founders, led by Jack Ma, working out of an apartment in Hangzhou, China. Its first website is English language Alibaba.com, a global wholesale marketplace 2001: Alibaba.com surpasses one million registered users 2003: Launches online shopping website Taobao Marketplace 2004: Alipay is launched as a third-party online payment platform 2005: Alibaba Group takes over the operations of China Yahoo! 2007: Alibaba.com completes its IPO on the Hong Kong Stock Exchange; Alipay goes global, enabling transactions between renminbi and 12 major currencies; opens its first European office in Geneva 2008: Taobao Mall (currently known as Tmall.com), a platform for third-party brands and retailers, is launched 2009: Alibaba Cloud is established 2010: Taobao Marketplace introduces online group buying marketplace Juhuasuan; Alibaba.com officially launches AliExpress to enable exporters in China to reach and directly transact with consumers around the world 2011: Tmall and Juhuasuan are spun off from Taobao Marketplace as independent platforms; logistics and shipping service, Fulfillment by AliExpress, is launched 2014: Tmall Global is launched to enable international brands to offer products directly to consumers in China; Alibaba Group goes public on the New York Stock Exchange 2015: Alibaba Group announces the expansion of its London office to serve as the company’s European hub; reveals the acquisition of the South China Morning Post 2016: Launches office in the Netherlands and buys controlling share in Singapore-based online e-tailer Lazada
if Alibaba.com was a consideration for their e-commerce plans now or in the future. Almost all respondents from all sectors of the industry have adopted a wait-and-see attitude. THE BIG QUESTIONS This begs the following questions: is the OP industry simply too focused on Amazon? Has Alibaba not made a big enough splash globally to be on the industry’s radar? Or does it simply not provide a good enough business proposition to warrant serious further investigation? Let’s take each question in turn. Based on industry responses such as “we consider Amazon more of a threat than Alibaba” from a large US reseller, or the following from a European wholesaler: “We are not taking Alibaba into consideration, we are more interested in Amazon”, dealing with the successful (re)launch of Amazon’s B2B division is more than keeping everyone in the industry occupied right now. It could also be partly to do with the answer to the next question regarding Alibaba’s international brand recognition. Even though the online giant launched in 1999, it pretty much kept itself to conducting business in China. It wasn’t until September 2014 that Alibaba really made a splash globally when it announced its international trading debut on the New York Stock Exchange. It hit the headlines for being the largest IPO ever in the US, raising around $25 billion. The stock has been volatile since the launch, to say the least, but is now trading at approximately its entry level share prices. Over the past year or so, Alibaba has been busy expanding its international operations. In Southeast Asia, it bought one of the region’s biggest e-commerce sites Lazada for $1 billion, while elsewhere it has been busy opening offices in Australia, the Netherlands, the UK, Germany, Italy and France. But Ma is clearly not satisfied with its international footprint so far. In an open letter to shareholders in October 2016, he unveiled plans to greatly widen the company’s presence across the globe. He said: “We are working to create the fundamental digital and physical infrastructure for the future of commerce, which includes marketplaces, payments, logistics, cloud computing, big data and a host of other fields. We believe the commerce infrastructure we have created in China can be applied on a global scale
opi.net poll Do you intend to use the Alibaba marketplace to generate sales?
YES,
33%
in the future
42%
What’s ALIBABA?
No 25%
Yes, Already using it 0%
100,000 Brands
sell on its platforms including 3M, Newell Brands & P&G
$5.1 Billion n Q2 SALES TO THE END OF SEPTEMBER 2016
430 Million annual active buyers 46,000+
EMPLOYEES
to lift up small and medium businesses and ordinary consumers around the world.” He went on to state that in the next two decades, the aim is to “serve two billion consumers, empower ten million profitable businesses and create 100 million jobs.”
One European dealer group told OPI that Alibaba is simply not competitive enough right now, and it would need to do some serious work on Google Search, for example, to deal with poor product descriptions and links before it would warrant any further investigation. THE VERDICT Clearly, Alibaba has work to do to convince an international OP audience of its pedigree, but with its e-commerce ecosystem coupled with a focus on the international market and a massive customer base, it is certainly advisable to keep a very close eye on it. It’s also worth remembering that the company has other initiatives designed to entice small businesses into the fold. Its cloud services, for example, already host 35% of websites in China and has cracked m-commerce – mobile already contributes over 75% of Alibaba’s total sales. In addition, more than six million businesses use the company’s Qianniu merchant mobile app on a daily basis which is designed to help them improve sales and marketing. With figures like that, innovations such as a virtual reality payment system, and an ultimate aim of connecting small businesses with customers globally, Alibaba is becoming harder to ignore. It will certainly stay on OPI’s radar.
NOTORIOUS ALIBABA The US Office of Trade Representatives (USTR) recently released its 2016 Notorious Markets List which details “physical and online markets around the world that are reported to be engaging in and facilitating substantial copyright piracy and trademark counterfeiting”. USTR has included Alibaba’s Taobao on the list. The company has reacted quite strongly to this, saying in a statement: “We are very disappointed by the USTR’s decision to include Taobao on its ‘notorious markets’ list, which ignores the real work Alibaba has done against counterfeiters.” Alibaba said that it considered the actions of the USTR to be unreasonable as it had “proactively removed more than double the number of infringing products listings than in 2015.” It went on to say that despite the USTR’s decision, it is fully committed to protecting the IP of rights holders and believes it has dedicated more resources toward protecting intellectual property than any other e-commerce company. In other related news, Alibaba recently became the first e-commerce platform in China to take counterfeiters to court. The case revolves around two vendors using Alibaba’s Taobao shopping platform to sell fake Swarovski watches.
February 2017
21ST CENTURY SILK ROAD Now to answer the final and most important question: does Alibaba.com warrant the attention and business of the office products industry? First and foremost, it is no longer an option to ignore e-commerce and as the biggest e-commerce business in the world, Alibaba.com could open many doors for resellers, such as direct international trading with other relevant businesses. A quick search in the Packaging, Advertising & Office category on Alibaba.com shows over five million available products in the Office & School Supplies sub-category from a wide range of suppliers in China, Thailand, Germany, Zimbabwe, Iran, Brazil, the Philippines and Uzbekistan, among others. Alibaba also offers a route into the vast Chinese consumer market with Tmall Global which many global brands and retailers are already using – it helps to remove some of the red tape usually required when selling in China. Speaking to OPI, Alibaba’s business development team offered the following advice for any business supplies reseller looking to use its platforms to break into the Chinese market: “If office products suppliers are looking to break into the Chinese consumer market, they must think very hard about product selection. What is it about their product(s) that is unique and is it something that the Chinese consumer would normally be unable to find in their home market? Chinese consumers are looking for products that are high quality and represent the heritage/culture of the country they are buying them from.” The last sentence is certainly worth noting. Research shows that the huge burgeoning Chinese
If office products suppliers are looking to break into the Chinese consumer market, they must think very hard about product selection
HOT TOPIC Alibaba
450 Million monthly mobile users
middle class is increasingly turning to international brands as they are believed to represent hallmarks of quality and assurance. However, there are concerns over the higher perceived risks that dealing with Alibaba – and by extension, China – present, in terms of logistics and supply and, importantly, counterfeit goods (see ‘Notorious Alibaba’, below).
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CATEGORY UPDATE
In an increasingly digital world, the pen and pencil are still in big demand – but identifying and riding the trends is key to tapping into the potential sales opportunities, as David Holes finds out
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he writing instruments market is huge, representing $2.1 billion of sales in the US alone. And it’s on the increase, with data from The NPD Group showing over 7% growth in the past year. Within this category pencils are outperforming all other products, with coloured pencils and pencil sets showing a particularly meteoric rise – up 22% and 56% respectively. “This growth is centred on the themes of art, colouring and personalisation,” says Leen Nsouli, Director of NPD’s Office Supplies division. “Gel pens are in high demand both for office use and artistic purposes, and the adult colouring phenomenon continues to drive coloured pencil sales in the US.” A similar tale is emerging in continental Europe. German manufacturer Faber-Castell, for example, has reported the best year in the company’s history, with total sales of €631 million ($670 million) propelled by 10% year-on-year growth. Among its best-performing markets are Latin America and Asia, but it sees big potential in Eastern Europe, India and Africa too.
The biggest challenge facing UK subsidiaries of international companies – exchange rate fluctuations – is out of their control At UK wholesaler VOW, Traditional Category Product Manager Jill Strutt also reflects on figures that confirm this threat: “2016 saw a 7% increase in the sales of own brand writing instruments, with many named brands either flat or in decline. We further believe that the adult colouring craze which previously boosted sales has run its course in the UK, with this market showing a decline of 17%.” Other global macroeconomic events are having an effect too. Thorsten Streppelhoff, COO at German manufacturer edding reports that its core Latin America markets – particularly Argentina, Colombia and Ecuador – are going through very difficult and turbulent times. However, he adds that its European
February 2017
BRAND AND EDUCATION FOCUS Karl-Heinz Raue, Head of Business Development at Faber-Castell, reports: “Consumers worldwide are increasingly asking for high-quality, branded products. We are seeing the benefits of a growing world population requiring more of our products for use in education. In industrialised nations there’s also an increasing amount of creative activity. In addition, offices and workspaces are becoming more colourful, causing a surge in demand for coloured pens.” Things don’t look quite as good across the channel with the UK’s referendum decision to leave the European Union having created uncertainties in this sector. It’s mentioned as a concern by both
British-based and continental European companies. GfK figures show that up to the end of September 2016, the UK writing instruments market was down by 8% – although in recent months the commercial market has bounced back somewhat. As Pentel’s Marketing Manager Wendy Vickery points out, most players have adopted the ‘keep calm and carry on’ approach: “The biggest challenge facing UK subsidiaries of international companies – exchange rate fluctuations – is out of their control. We are experiencing price inflation and this means it’s never been more important for manufacturers to demonstrate the superiority of their products over own brand items, in terms of quality, innovation and genuine value for money.”
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Writing Instruments CATEGORY UPDATE www.opi.net
markets are performing well, with the Netherlands the stand-out performer, mainly fuelled by B2C channels. “We’re also seeing double-digit growth in both southern and eastern Europe,” he says, “despite difficult economic and political circumstances, and sales in Russia and Turkey have grown significantly.”
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INCREASING COLOUR SPECTRUM One emerging writing trend that’s currently seeing a rise in popularity is the art of ‘hand lettering’. The desire to produce something personal and artistic has now embraced calligraphy, with everything from greeting card messages to restaurant menu boards reflecting this new creative movement. Bland, printed fonts are on the wane and are being replaced by handcrafted lettering that showcases the individuality of the writer. Germany’s Stabilo is one manufacturer that has been quick to identify this opportunity, updating its traditional line of pens and highlighters with new shades and introducing products designed specifically for writing in a whole spectrum of colours. “The borders between writing and painting are disappearing,” says the company’s International Sales Manager Sabrina Hamann-Gleißner. “Colour is the key driver everywhere, with a strong wish among consumers to produce something unique. Creativity is the new watchword in many hobby and craft-making areas – people are going online for tips on how to use writing instruments, with blogs and video tutorials acting as drivers during their digital journey which can be used to grow sales. “Social media is increasingly important too,” she adds. “People are interested in seeing what others are doing with pens – they upload their own creations and share other content they like. There’s a desire for inspiration and personal expression, but consumers now expect an individual approach – classic target group marketing no longer suffices.” In terms of specific types of writing instruments European wholesaler ADVEO believes that for the first time the market for roller pens has become larger than that for ball pens. “This means we’re actually seeing the own brands in decline as they have more ball pens in their assortment,” says Purchasing & Category Director Pieter Wolters.
edding’s 8015F laboratory marker for fine-line labelling on small surfaces
“This switch has in part been caused by the colouring trend which started with felt-tips before moving onto roller pens. We’ve seen incredible growth here, with brands like Staedtler and Stabilo driving this forward and introducing an increasing range of colours into roller and gel pens. However, we believe that 2017 will be the peak for this colouring surge. Although, despite a fall off thereafter, it won’t disappear completely.” Ken Newman, Director of Marketing at Zebra Pen in the US, remarks on the drift away from ball pens too, with consumers now preferring the smoother writing experience that gel pens offer. He adds: “Consumers are also gobbling up coloured pencils and markers, and this is being driven by pack configuration, with retailers pushing the envelope and offering ever-larger packs where cost savings per pen is the benefit. Manufacturers are additionally providing consumers with a free pen on packs as a way of enticing purchase and trial. This seems to be gaining some traction.”
The volume [for stylus pen products] is still small, but we believe it’s a developing category In a nod to the increasing amalgamation of the digital and analogue in this segment, ADVEO has seen an increase in demand for stylus pen products. “The volume is still small,” says Wolters, “but we believe it’s a developing category, especially now that brands such as BIC are getting on board which should mean we all have access to a stylus at an affordable price. “Furthermore, we see the development of sophisticated digital pens such as the Apple pencil, the Adonit pixel and Wacom products. These are aimed at professional users, but are being picked up quickly by regular consumers too. I’m curious to see whether a product that combines a paper notebook with a digital product is the next step.” Newman remains cautious about this particular sub-category. “We innovated the stylus pen category
SCHOOL OF THOUGHT The back-to-school (BTS) season remains a critical period for all players in this sector, but this too is undergoing some changes as explained by Vickery: “In terms of consumer buying, most retail purchases are made during the weekend prior to the start of the new school term – it appears that parents and students are still leaving their shopping until the last minute. That said, BTS has become even bigger because it also incorporates exam time, the traditional school holiday period and the return to university and college in the autumn.” Schneider also notes that BTS now covers a broader period of time: “It’s still by far the most important seasonal peak. However, special offers should not be
The need for writing utensils is everywhere, so there’s really no such thing as a bad market
Pentel’s Hybrid Dual Metallic pens
confined to the period between July and September – different starting dates for schools and universities and how the requirements for these student segments differ should also be taken into account.” While the BTS season is still seen as one of the major seasonal sales periods, it’s not the only buying peak. “The Christmas season is even more important to us,” says edding’s Streppelhoff. “That’s when our creative products are heavily in demand.” VOW’s Strutt concurs: “Sales of products such as gold/silver metallic pens go through the roof in the run-up to Christmas – we typically see an increase in revenues of around 650% in the October to December period compared to the three previous quarters.” The huge and diverse writing instruments sector is evidently in very good health and still offers excellent opportunities for those able to track and exploit its many fashions and trends. As Schneider sums up: “The need for writing utensils is everywhere, so there’s really no such thing as a bad market.”
February 2017
ETHICAL MATTERS Germany’s Schneider Pen meanwhile, has observed an upswing in consumer desire for ecological and sustainable products. Its range of writing instruments made from bio-based or recycled plastics, for example, has been in strong demand. Head of Public Relations Martina Schneider says: “Environmentally-compatible production coupled with humane working conditions now play an important part in the buying decision. In addition, legal requirements for materials and components, combined with customer requests for resource conservation, have increased exponentially. Simple statements are no longer sufficient to prove this and certificates from independent auditors are now obligatory. Having already met all of these expectations due to ‘demanding’ German environmental and social standards has put Schneider in a really good position.” This knack for spotting an emerging need, fashion or craze, together with the ability to identify a gap in the market, is seen as key to success in the writing instruments sector. Pentel believes it has achieved both and is preparing for a spring launch of what it’s calling the most exciting product the industry has seen for many years. Its Hybrid Dual Metallic pens write in two different shades depending on the colour of paper they’re used on. The ink gives an iridescent effect, displaying different colours as the paper is held at different angles. As Pentel’s Vickery explains: “Glitter and metallic gel pens have been on the market for years, but there’s been nothing like this before. Pentel is gearing up for this major launch, targeting teenagers, students, artists and designers in particular.” Another growth area is the industrial sector and marker pen specialist edding is targeting this space. Although there has been a shift away from traditional marking products in the logistics business in favour of electronic scanners, there is still robust demand for core products in addition to new opportunities in more niche arenas such as medical or science laboratory applications. Much R&D effort is currently aimed at producing sophisticated ink technologies with a view to moving into other industrial sectors. The company is also tapping into the personalisation trend. “The increasing consumer demand for customisation of their fashion items – shoes, furniture and other accessories – is one of our strongest growth drivers,” says Streppelhoff. “Our recently launched permanent sprays and porcelain brush pens have delivered double-digit growth already and we believe there’s huge potential here, fuelled by our ability to introduce additional new colours and decorative effects.” ADVEO still identifies great scope in the development of the erasable pen, first introduced about a decade ago. “The Pilot FriXion pen was a true innovation in this category,” says Wolters. “Other brands were quick to get on board – Newell with
Papermate Replay and Uniball with Phantom – and it’s rumoured that BIC will be entering this segment soon. I forecast that we’d see this business becoming linked with the colouring trend and, sure enough, Pilot has just launched an erasable felt tip marker that will no doubt drive further sales.”
CATEGORY UPDATE Writing Instruments
several years ago and had some initial success launching a line of products. But in the past couple of years we’ve seen sales slowing. We’ll continue to evaluate this sector as technology develops, but for now there’s been no real wholesale shift.”
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CATEGORY UPDATE
T
Demand for office technology is high and it’s helping to boost employee productivity. But it’s also bringing additional challenges that every company and individual must face, says David Holes
oday’s workspace is becoming more and more populated by sophisticated machinery and advanced technology. The office technology category includes the familiar large business machines such as binders, laminators, scanners and shredders, but now also encompasses less obvious products such as LED lighting, charging stations and the burgeoning amount of desktop furniture that now incorporates a USB port.
FUTURE-PROOF The importance of future-proofing your product portfolio should not be neglected, says Bleese. “Today’s business machines must not only meet the current technological requirements, but also be able to progress and adapt to future upgrades.”
February 2017
TECHNOLOGY DRIVER It’s a rapidly expanding market. As Stuart Bleese, Technology Category Manager at UK wholesaler VOW, explains: “We’re seeing strong market growth in business technology coupled with relentless product development. Powerful brand marketing campaigns are raising awareness of this category and driving consumer demand. Technological advances are also compelling people towards professional versions of devices rather than opting for the more basic, entry-level models.” Some sub-categories are particularly strong. Sales of laminators continue to grow and the market for label writers is buoyant, with awareness programmes from big brands such as Dymo and Brother impacting the market. Conversely, dictation machines and binders are in decline, the latter impacted by the rise of the tablet for viewing presentations and less reliance on paper-based reports.
Sales of shredders have also declined overall, mirroring this general reduction in print quantities, although increasing awareness of data protection issues coupled with improvements in performance mean that demand for auto-feed models from the leading manufacturers in particular remains strong. One technological trend gathering pace is for portable projectors and interactive TVs that can easily link with smartphones and other mobile technology. And scanning technology is becoming ever more advanced, with machines that scan and file documents automatically especially popular. Cameras are also in high demand, particularly from the education sector and sales of wireless ‘Qi’ charging pads are on the rise.
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Office Technology CATEGORY UPDATE
European wholesaler ADVEO forecasts that the office technology market is going to be driven by ergonomics and design in the future. “The look and feel of a product is becoming increasingly important,” says Purchasing & Category Director Dennis Albers. “There’s a clear focus on office ergonomics now, with companies more conscious about health and wellbeing in the workplace – particularly in countries such as Germany and the Netherlands. “Today’s workforce is also far more tech-savvy than previous generations which is acting as an enabler for all manner of office technology. Overall sales in
Today’s business machines must not only meet the current technological requirements, but also be able to progress and adapt to future upgrades
www.opi.net
traditional business machines categories are stable, but the electronic labelling category has been a massive performer over the past year in all countries, and there’s been a surge in sales of mobile solutions, accessories and communications tools suitable for the business environment.”
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BLURRING OF BOUNDARIES The introduction of high-tech equipment into the workplace has led to huge increases in productivity, but it’s also proving a double-edged sword for employees, with the boundary between work and home life becoming increasingly blurred. Productivity is nearly five times greater than it was in the 1970s and could increase by another 22% by 2020, according to a report from the Centre for Economic and Business Research. Email and cloud computing are making it far easier for people to keep in touch than ever before. But the survey also reveals that many workers now feel chained to their email and smartphone at all hours of the day – the age that work stopped as we left the office is long gone and it now increasingly bleeds over into our private lives. In a recent interview with Microsoft, its Chief Envisioning Officer Dave Coplin admitted that it’s becoming a problem: “The technology that was meant to liberate us has somehow become a constraint.”
And despite the proliferation of office tech and the clear business benefits this can bring, it appears that many companies are relying heavily on the use of employees’ own personal devices, rather than investing their own cash. A recent survey by IT research organisation Gartner shows that although the vast majority of workers receive some corporately-issued technology, it’s usually a desktop or laptop PC. In contrast, a paltry 23% of employees receive mobile phones and even fewer a tablet. As such, the majority of smartphones used in the workplace are personally-owned devices. In this era of mobility it’s surprising that corporate provision of mobile devices is so low, especially when the increased productivity they bring can easily justify the cost. It seems that firms are relying on the goodwill of their employees to provide essential business technology, rather than putting their hands in their own pockets to fund it. Projections also suggest that the global demand for mobile devices is actually beginning to slow. Sales of smartphones and tablets are expected to remain flat in 2017 according to Gartner, with only a small increase projected as we move into 2018. Indeed, worldwide shipments of all devices – PCs, tablets, ultramobiles and mobile phones – are projected to remain flat in 2017 (see image below). “The market is stagnating, with mobile phone shipments only growing in emerging Asia-Pacific markets,” says its Research Director Ranjit Atwal. “Market saturation and a slower rate of innovation mean consumers have fewer reasons to upgrade or buy new devices. They’re now seeking fresher experiences in emerging categories such as head-mounted displays, virtual personal assistants and wearable technology.”
Source: Gartner
ata protection equipment, including all manner of document disposal hardware – of online or offline information – are a firm part of the office technology category. Cybersecurity breaches in particular are on the increase and reports of malicious attacks constantly in the news. Security software to protect against this threat should be an essential part of every company’s arsenal. OPI talks to Hend Ezzeddine, Cybersecurity Practice Director at consultancy Expressworks about the causes of this growing menace and the countermeasures that can be taken. OPI: What’s behind the unprecedented level of attacks that firms are now reporting? Hend Ezzeddine: While we’re seeing the number of attacks trending higher, we are also experiencing more rigorous reporting of cyber breaches and the uncovering of attacks that happened several years ago – Yahoo recently announced a breach that involved one billion users that was tracked back to 2013. That being said, there are psychological factors that are influencing hackers’ behaviours and pushing them to aim higher. Aside from the financial motivation, hackers get a thrill from breaking the rules and are constantly looking to outdo their peers. And despite awareness of the risks, hackers still remain one step ahead of the game. If we take a closer look at the attacks being reported, 65% are due to user error or unsafe cyber behaviour and these root causes can’t be addressed by technology alone. The human element has to be at the centre of your defence system. Hackers know that deception is not an art; it’s a science that applies successful triggers to prompt humans in the chain into doing the wrong things. OPI: The media reports many sources of cyber attacks . For the business community, where do the main threats come from? HE: They come from within. Insiders – both malicious actors and inadvertent users – account for over 60% of cyber breaches. We’re also seeing an increase in incidents caused by third parties, such as current and former vendors, contractors, suppliers and business partners. The smaller these companies are, the higher your risk. The attackers target entry to your system by seeking a back door through these smaller companies, where restricted budget and resources mean cyber resilience may not be sufficiently robust.
Espressworks Cybersecurity Practice Director Hend Ezzeddine
OPI: How is the way we work today, with increased digitisation and connectivity, multiple workplace locations and bringing our own mobile devices into the office, affecting the cyber risks we take? HE: We all want to take advantage of the productivity and creativity that digitisation offers, but also don’t want to add additional risks. It comes down to making cyber resilience a personal matter as opposed to a compliance rule. With all the connectivity available outside of a company’s network, it’s hard for IT departments to control the data and assets that are being exchanged. However, it’s possible to influence users so they exercise control over their own behaviours. OPI: What would be your takeaway message that everybody should remember? HE: My advice would be ‘prepare for the worst and hope for the best’. Companies should realise it’s not a matter of ‘if’, but ‘when’ they will be hacked.
February 2017
OPI: How can businesses reduce their risk of suffering an attack? HE: One of the biggest mistakes that companies make with cyber resilience is to disassociate the individual from the organisation – the user must be part of the solution and it must take this human element into account. The fundamental problem centres on how humans interact with the technology (usability of security), how they perceive risks (psychology of security) and how they make decisions that relate to potential attacks (cognitive side of security).
Given that background I’d say the top five things we should all be doing are: 1. Know your enemy: gain an understanding of how attacks occur and where you may be making it easy for the hacker to find an entry point. Posting personal information on social media or having your organisational chart easily accessible on LinkedIn opens the door for social engineering and CEO fraud type of attacks. 2. Know your crown jewels: often, we think that customers’ financial data is the only valuable information at risk, but intellectual property (IP) theft can be just as damaging and for individuals, their health records are as valuable as credit card information. With the rise of the cloud, we’re increasing our risk of exposing competitive information to outsiders and these types of theft may never be detected at all. 3. Be aware of your risk perception: individuals and organisations tend to think they are at less risk than their peers – just like we all tend to think we’re better drivers than anyone else on the road. Adding more technology can create a false sense of security causing us to behave more recklessly. 4. Spread the word: cyber attacks should be a permanent topic of conversations at both the corporate and individual level. Hearing about attacks (and near misses) helps foster a deeper sense of awareness that it may happen to you. 5. The individual and the organisation are one entity: Any disconnect here can drive carelessness with company assets. We think that because we are using company devices, our personal data remains safe. However, 80% of us use the same device both for work and personal online transactions. When you expose your company’s data, you’re also exposing your own. The recent Sony hack was a perfect example of this.
CATEGORY UPDATE Office Technology
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CYBERCRIME SURVIVAL
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VENDOR PROFILE
CELEBRATING 100 YEARS
of Fellowes
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As Fellowes celebrates its 100th anniversary this year, OPI takes a good look at the manufacturer, its history, ethos and values, its product journey and its leadership team – past and present
ellowes Brands celebrates its 100th anniversary in 2017. A mainstay of the office products industry for nearly the same length of time, it has grown from a small Chicago speciality manufacturer of file boxes for banks to a leading global manufacturer of a broad line of business products. It continues to be a family business, owned and operated by the Fellowes family. The story began with a partnership of two unlikely entrepreneurs who combined their talents to build a great company. Walter Nickel joined a company from Lincoln, Nebraska, shortly after graduating from the University of Nebraska in 1916. He was hired as a sales rep to sell the company’s file box which was designed for old bank records. His selling success, however, was impeded by a poorly-designed product. When the young sales rep brought this to the attention of his boss, he was largely ignored. In time, Walter left the company and set out on his own. He designed a similar product which addressed the problems his customers had shared with him. The file box fit standard-sized bank forms properly and was made out of a rugged new material Walter had noticed – corrugated fibreboard. This was first introduced for shipping boxes which would ultimately replace
Co-founder and first President of the Bankers Box Company, Harry Fellowes
wooden boxes. Walter set up shop in an office building in the tailoring quarter of Chicago in September 1917. Harry Fellowes, a custom clothes maker, happened to work on the eighth floor of the same building. He had a nice small tailoring business, but he was restless and had his eyes open for a better opportunity. Harry, a curious and outgoing man by nature, contacted Walter and in the process learned about his business. He soon became intrigued with the innovative little file box which seemed to be warmly received by banks. One day, Harry noticed Walter packing up as though he was closing. When he enquired, he learned that Walter had been drafted into military service for WWI. He was to report for active duty on 2 May 1918, just a few days hence. Harry acted upon his instincts and offered to buy the business. For Walter this seemed
[Harry Fellowes] soon became intrigued with the innovative little file box which seemed to be warmly received by banks
VENDOR PROFILE
Fellowes’ first product – a records storage box
Fellowes Brands
a convenient way to dispose of his inventory and monetise his fledgling venture. Harry bought the business for $121.40 – roughly the cost of the inventory. The war was over six months later and Walter wrote to Harry to ask if he might be willing to sell the business back at a nice profit. In the meantime, Harry had fallen in love with the business and had no interest in selling. But he recognised Walter’s talent
It was not long before Harry began to get enquiries from stationery dealers about stocking the products locally
Right: Fellowes ergonomic, quick set-up record storage box introduced in 2013 shares many similarities with the original Bankers Box from 1917 Below: The first Bankers Box Company production line in circa 1925
and his own shortcomings, so he invited Walter into a partnership. They incorporated the following year, in 1919, as the Bankers Box Company, which continued as the corporate name until 1983. The two partners were as different as chalk and cheese. Harry was 39 years old and the more experienced. He had an expansive personality and a natural gift in selling and marketing. He was the President, the strategist and the spark plug. Walter was 15 years younger and more reserved and yielding. He
had worked as a boy in his father’s foundry and was naturally drawn to technical matters and processes. And he had an inventive mind. The ‘flint and steel’ combination made a great spark. The partnership flourished as they soon began expanding by selling boxes to other industries: insurance, automotive, trucking and others. New box sizes were added. It was not long before Harry began to get enquiries from stationery dealers about stocking the products locally. This seemed a promising way to expand the business. For many years the company sold both directly to commercial end users and also through the trade. In time, however, the trade channel won out. A second generation of the Fellowes family joined the business in the 1930s during the Great Depression. A third Fellowes family generation led the business from the 1980s through to July 2014 when the fourth generation took over. For most of its history two generations have served side by side in the business. Today, James Fellowes – grandson of Harry Fellowes – serves as non-executive Chairman of the Board while John Fellowes II is CEO of the company.
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VENDOR PROFILE Fellowes Brands
Fellowes Brands:
INNOVATION IN MOTION Fellowes Brands has been shaped by four generations of leaders, each with their own unique opportunities and challenges. What links them all is a core set of values, a passion for innovation and a relentless drive to remain relevant
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here are two generations still working side by side at Fellowes. OPI’s Heike Dieckmann speaks to non-executive Chairman of the Board James Fellowes and current CEO John Fellowes to find out more about the enduring appeal of this company that now stands for so much more than a storage box.
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OPI: What were the initial principles and values that the founders of Fellowes established ? James Fellowes: One of the most impressive things about the co-founders was their idea that principles and values, not circumstance, should form the basis of decision making. My grandfather had been working jobs and running a small business for 25 years when the Bankers Box opportunity presented itself so he had plenty of experience in both good businesses and bad ones. He knew the pitfalls of a weak company and wanted to build an enduring business on principles that worked for the long term. Business integrity formed the centre of his thinking. This meant delivering on promises, beginning with the quality and performance of the product. It meant dealing honestly and respectfully with all parties in the business equation: customers, employees and suppliers alike. Both Harry Fellowes and Walter Nickel built teamwork among the workforce and trust between staff and the owners of the company. They worked hard and imaginatively to continuously improve the product as well as the processes in the business. OPI: Are these values still at work today? James: Yes, you could say the co-founders’ fingerprints are clearly in evidence at Fellowes
Non-executive Chairman of the Board James Fellowes
OPI: You mention the team. How is your senior leadership organised and how do you keep a global business on the same page? John: Our executive team consists of seven individuals who represent all aspects of the business. We meet formally nearly every week, but our communication is more or less continuous. Within this team I work especially closely with Mike Parker, Global President; Michel van Beek, EMEA President; and Jim Lewis, our Chief Operations Officer. Each of these three positions carries important responsibility and all of the individuals are remarkably gifted and empowered to achieve our high standards and goals. We have worked together now for some years. We know and respect each other and have learned how to work together effectively. In turn, each of our executive members of staff is working with teams that serve at functional levels of the organisation.
Fellowes Brands
OPI: Has the relationship between the family and the business remained much the same over the past 100 years? John Fellowes: Yes, pretty much. Like previous generation CEOs, I am fully engaged in the business with my mind, heart, and soul. I work closely with our team with the goal of making the business stronger, faster and better. My grandfather reminded me of a long-standing family principle when I began to rise in leadership. He said: “Our family serves the business; the business does not serve our family.” I think this has been a real differentiating factor for Fellowes over the past 100 years. Our people see it, emulate it and it shapes our culture. We are committed to thinking about our roles at Fellowes from the perspective of ‘service’.
VENDOR PROFILE
Brands after 100 years. About a dozen years ago our board formally adopted four core values: integrity, initiative, passion and teamwork. These values were identified by a taskforce of Fellowes employees who studied a very critical question for several months: who are we and what do we stand for? They came up with these four core values that were embodied and practiced by the co-founders.
Collaborative work environments encourage teamwork at Fellowes Brands’ headquarters
Teamwork is a core value and something we do particularly well. Cross-functionality in our teamwork is critical to its success. OPI: You have been listed for a number of years as one of Chicago’s best companies to work for. What is it about your company that makes it attractive to employees?
Teamwork is a core value and something we do particularly well. Cross-functionality in our teamwork is critical to its success John: We have received this recognition on numerous occasions in connection with an annual employee survey which has been run by the Chicago Tribune. We have performed well because we are committed to an excellent workplace culture and ensure our people share and practice the timeless values of the business. We also have a high level of engagement in the survey, with 89% employee
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VENDOR PROFILE Fellowes Brands
participation. Our people know that we take the results seriously and use the feedback for continuous improvement purposes.
By the 1980s we were beginning to find this boundary confining. We sensed we needed to broaden the product offering because the industry was beginning to consolidate. We began to expand by ‘adjacencies’. Paper shredders were adjacent to our records storage boxes because records destruction follows storage in the life cycle of a record. So we began our shredder business in 1982. This adjacency led to another one – binding and laminating. Our customers tended to combine these two categories alongside shredders and we added binding and laminating through an acquisition in 1998. In 1983, we also moved into plastic trays for diskette storage which was adjacent to our corrugated diskette boxes. This led us to venture
OPI: Fellowes product range has changed substantially over the past 100 years. Can you share with us its progression? James: Sure. There is a logical flow. Until 1982 (our first 65 years), 100% of our range was made up of Bankers Box records storage boxes and drawers – all made from corrugated fibreboard. Up to that date, we had designed many styles and offered solutions for several kinds of records forms, but we always stayed inside this boundary.
Our tried and tested Bankers Box products still represent about 25% of the total business
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CEO John Fellowes
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into the broader category of computer accessories which we developed over the 1980s and 1990s. We expanded our computer accessories offering one category at a time through internal new product development or acquisitions. By the year 2000, computer accessories had expanded to over 40 sub-categories and represented nearly 50% of our global sales. Today, this business takes the shape of our Mobile Accessories segment for mobile digital devices and Workspace Management products which promote ‘well-being’ in the workplace. During this journey we have acquired 30 companies and launched hundreds of new products. That said, our tried and tested Bankers Box products still represent about 25% of the total business. OPI: How have these product categories fared in the face of digitisation and the decline in the usage of paper? John: Paper consumption is the driver for the traditional office products market. We have soberly assessed the decline in paper usage since 2005 when consumption peaked and then began to reverse. While the trend line points gradually downward, we are working with great energy and resolve to develop new categories that shift us away from paper dependence. In particular, we have invested in products which promote health and productivity in the workplace. A good deal of our investment and early success has come from our AeraMax air purification products. In five years’ time we have established a good market position in both the household and SOHO market. In addition, we have broken new ground with an innovative commercial-grade machine designed for ‘shared space’ applications like bathrooms, locker rooms, kitchens, medical offices and other places where odours, allergens or germs otherwise prevail. We are also launching new categories in 2017, which enable an active working environment. For
The Lotus Sit-Stand Workstation provides a solution to prolonged periods of sitting in the office
Fellowes Brands
OPI: Fellowes is a family business. What has each generation of leaders brought to the table? James: Each generation in the business has been successful in taking Fellowes to the next level. Harry Fellowes and Walter Nickel really pioneered and established the market for orderly inactive records keeping. They built a great business and persevered in the face of the Great Depression and World War II. The second generation, Folger Fellowes and John Fellowes, began in the grim 1930s. Their employment was interrupted during WWII, but when they returned, they built the Bankers Box Company to a national business, with national distribution through wholesalers and dealers in the US. They also sowed the first seeds of business in Canada and the UK. With my brother, Peter, our third generation worked to take Fellowes to another level. We expanded geographically to become a global enterprise with 15 overseas subsidiaries on five continents, with about 50% of our revenues coming from business outside the US. We also expanded the product range into new categories. About 75% of our sales today come from product categories that were added after 1982. From the founding of our business in 1917 up until the last decade, increased paper consumption has provided a helpful wind in our back. But, of course, the wind has shifted. Now we navigate through a moderate headwind with paper usage declining.
VENDOR PROFILE
example, this February we are introducing our new Lotus Sit-Stand workstation (see below). This is an innovative solution with patent-pending technology that enables employees to effortlessly transition between sitting and standing.
Each generation over the past 100 years has dealt with the challenges of its time. Declining paper usage just happens to be ours Above: Fellowes AutoMax 500C Auto Feed Shredder
In 2014 we completed the transfer to the fourth generation with John Fellowes II now serving as CEO. John and his team are leading us into growth markets to ensure that we grow and prosper. OPI: John, this sounds like additional pressure on the fourth generation and your team, particularly given the challenging market situation. How are you coping with that? John: Well, each generation over the past 100 years has dealt with the challenges of its time. Declining paper usage just happens to be ours. The good news is that paper consumption is declining slowly and predictably. In addition, our family, our board and our leadership team are committed to investing disproportionately in new exciting growth categories. We are investing in both core and expansive new product development and seeking acquisitions to help reshape our product portfolio.
February 2017
OPI: Finally, what plans do you have for celebrating your 100th anniversary this year? John: We have planned a year-long schedule of events and initiatives that will culminate in September. That month marks the moment when Walter Nickel ventured out on his own with his newly designed file box for bank records. We are organising employee and customer events in our 16 country locations around the world. My father is currently completing work on a 100th Anniversary Fellowes Brands History. It should be fun!
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HOW TO...
In the final part of OPI’s How to... guide to Google Analytics, Andy Crestodina assesses the five little web design decisions that cause big analytics problems
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uring the web design process, hundreds of decisions are made. Some of these decisions affect marketing far into the future, meaning some little web design decisions have a big impact on how you use analytics. Here are five ways in which web design decisions can help or hurt your analytics. 1. THE THANK YOU Web design question: What happens after someone completes a form, thereby becoming a lead? How does the website say thank you? Analytics impact: Goal tracking Some websites don’t take visitors to a thank you page. Instead, they show a little thank you message on the same page, usually at the bottom. This makes tracking goals more difficult. A ‘destination goal’ is a type of conversion in Google Analytics. It measures when visitors reach a goal URL – typically a thank you page. They’re easy to create, making conversion tracking simple. If your website doesn’t have thank you pages, you’ll need to use Event Tracking which requires a bit of programming. Not recommended. ProTip: Thank you pages are an opportunity to offer another message or action to your visitors. Don’t make it a dead end on your website. Keep visitors moving by offering content or another conversion.
Thank you pages are an opportunity to offer another message or action to your visitors. Don’t make it a dead end on your website These questions can guide your decisions of how (and if) to integrate. • How often do you send email? • How much work would it take to import that list of subscribers into your email system before sending each email? • How much control do you want over your visitors’ experience and your analytics? 3. THE LOCATION OF THE BLOG Web design question: Where is the blog located? Is it in a directory, on a subdomain or a separate website? Analytics impact: Tracking content performance The URL of the blog content can make it easy to track performance of posts… or very difficult. This is a web design decision with both measurement and search optimisation impacts. • Separate websites such as www.companyblog.com or company.blogspot.com
February 2017
2. EMAIL SIGN-UP INTEGRATION Web design question: What happens when visitors subscribe to the newsletter? Do they stay on the site? Or do they land on a page on a different domain? Analytics impact: Goal tracking This decision also affects how easy it is to track conversions. It saves time to connect your website to your email provider, so every new subscriber goes right into your list. But it can cause problems. First, you can’t use a destination goal. The visitor left the site, so there isn’t a goal URL. Tracking the
conversion is trickier. According to Google Analytics, they left, so it looks like a failure, not a success. This web design consideration goes beyond analytics and into messaging and marketing. You don’t have total control of the thank you pages on your email service provider website. Email subscriber thank you pages are opportunities to offer more and get more in return. But if you send them away, all bets are off.
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Google Analytics HOW TO
Analytics for blog content may be in a completely separate account which skews traffic sources, time on site, etc. (Also, this is bad for search engine rankings, since domain authority is diluted across two websites!) • Subdomain such as blog.company.com Although everything is in the same account, filtering for just the blog content within the Behaviour > Site Content > All Pages report isn’t easy, since the ‘relative URL’ (everything after the .com) doesn’t indicate what is and isn’t blog content. The word ‘blog’ isn’t in the relative URL for every post. (Also, not bad but not SEO best practice) • Directory such as www.company.com/blog Now, using analytics is easy. The URL of every post includes the word ‘blog’. If you’d like to look at just blog posts in the All Pages report, just type blog into the filter box. Voilà! There are all your posts. (Also, this is ideal for SEO, as links to blog posts share more value with the other pages within the domain)
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4. SITE SEARCH TOOL Web design question: How is the site search tool built and what appears in the URL on the search results page? Analytics impact: Tracking of search items When visitors use the search tool on your website, they arrive at a search results page. If the phrase they searched for appears in the address bar on this page, then you’ll have access to a very valuable report in Google Analytics. The Site Search > Search Terms Report shows every phrase that visitors entered into your search box, but only if Google Analytics can grab the phrase out of the URL. The query parameter appears just after a question mark or ampersand. It’s followed by an equal sign and then the search term. It might be ‘search_term’ or ‘s.’ The query parameter for Google is ‘q’ which appears in the address bar for every search you’ve ever done there! When setting up Google Analytics, specify your query parameter, which turns on the Search Terms report. This report contains valuable insights. But if your search tool is built in a way that doesn’t push the search term into the URL, you’re out of luck. No insights for you!
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5. EVERYONE ON ONE PAGE/ SEPARATE PAGES Web design question: When to use lightboxes, long pages and sections. Is there a page for each topic? Or does the site combine many things into single pages? Analytics impact: Tracking and search friendliness Designers want to make things easy and pretty. Sometimes this means tucking things away into tabs, using rollovers or having things appear as pop-up lightboxes. At other times, it means combining many things into one page. But Google Analytics works using Javascript, which is typically triggered just once per page when it loads. So if a visitor sees a page that combines several topics, your analytics won’t tell you which they came to see. Example one: A website has a services page, with a listing of five company services. Each has an icon, a beautifully-written paragraph and a testimonial.
Problem: Since the services all appear on the same page, analytics can’t tell you which one visitors were interested in when they clicked. Fix: Make a separate page for each service. Now the Site Content > All Pages report will show you which of these services is the most popular among visitors. Example two: A website has a team page, which shows the smiling face of all ten employees. Clicking a person’s face brings up a pop-up window with the bio and contact information. Problem: Since the pop-up windows aren’t web pages with URLs, Google Analytics doesn’t know which ones got clicked how often. Also, they won’t rank in Google when people search for a person’s name. Fix: Make a separate page for each team member, so the Site Content > All Pages report shows the interest for each person, and each profile page can be indexed and ranked in Google. If it doesn’t have a URL, it doesn’t show up separately in analytics and it won’t be indexed in Google. Make sure every topic (service, product, person) has its own page.
When setting up Google Analytics, specify your query parameter, which turns on the Search Terms report WHY CAN’T WEB DESIGNERS AND ANALYTICS GET ALONG? Don’t make it any harder than it should be. Work with designers and developers who understand how to use analytics and make good decisions for marketing. That’s the point of the project after all! If you’re going through a redesign and aren’t sure if your designers are building a site that makes future measurement easy, we recommend that you share this article with them ASAP! Andy Crestodina is co-founder and Strategic Director of Orbit Media Studios, a US-based company dedicated to web design and development. To read Crestodina’s original blog, visit: www.orbitmedia.com/ blog/web-design-analytics.
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EOPA Presentation Dinner
8 March 2017 Winners of the 16th annual European Office Products Awards will be announced at a glittering industry dinner on 8 March 2017 at the Hotel Okura, Amsterdam
Book Now
To book your seats at this unmissable networking event or for more details,
visit www.opi.net/eopa2017 or email awards@opi.net
Because sometimes LESS IS MORE
SPOTLIGHT
Michelle Sturman talks to Australia’s Lectronic Trading to find out more about its unique logistics model
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here are probably few logistics companies in the business supplies industry that can boast annual sales of almost A$20 million ($14.6 million) with just four employees. But then, Australian outfit Lectronic Trading is no ordinary business. The Australian OP industry has always been challenging in terms of product distribution due to its vast geographical spread. While European and US wholesalers have investigated the opportunity for their models down under, none have ever been bold enough to launch, with the consequence that the local market has had to find other ways of shifting product through the supply chain. Bridging the gap between vendor and reseller, Sydney-based Lectronic works by consolidating both product and suppliers. Put simply, the firm provides logistics in the form of real time individual store replenishment and efficiently consolidated product orders for retailers. Products are transferred by manufacturers to Lectronic’s two large warehouses, which in turn supply customers via an Electronic Data Interchange (EDI) system. COMPLEX TECHNOLOGY The EDI system enables product to be sent to customers without encroaching on the suppliers’ brand and pricing. But as Lectronic owner Mark Gartner explains, while this sounds incredibly simple, the business works at the complex end of the spectrum using EDI trading that enables a seamless flow of information between all systems in the supply chain so that stock can be replaced at the right store at the right time.
• While it is relatively easy for the big suppliers that can afford the investment in technology, what about the smaller supplier with a limited number of very innovative products? Or the supplier that has a focus in a different market but still has several items relevant to this market? • Australia is a big country to cover when shipping product; there needs to be a certain critical mass to make the shipping costs feasible. • Minimum order value or quantity. The system falls over if one store needs six items but then doesn’t meet a minimum order value. Mark Gartner
February 2017
The business works at the complex end of the spectrum
Lectronic’s customers include some of the biggest names in Australian retail and B2B business supplies operations, such as Officeworks, Target and OP dealer group Office Brands. “We provide some retailers with over 1,000 SKUs representing more than 100 suppliers,” says Gartner. Lectronic deals with manufacturers such as RB, Unilever, SC Johnson, and Vittoria Coffee. Since its launch in 2003, the company has worked tirelessly to overcome numerous issues that plague Australia’s specific logistics environment. Gartner believes he is now close to resolving many of the standard issues through its unique system:
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Lectronic Trading SPOTLIGHT
• There is a reluctance for some very large manufacturers to pack smaller quantities, when they have worked for many years to get to the point where delivery is in full pallets or rows of cartons. It is seen as a retrograde step to go back to a very large number of small picks. • The expertise required to maintain the ongoing integrity of the system.
IN A NUTSHELL – HOW LECTRONIC WORKS
To master all these issues, from the outset there was a massive investment in technology – it took seven months to build the original logistics system before a sale could even be made. Gartner ensured Lectronic became synonymous with a specialisation in EDI ordering, and went to market with no minimum order quantities or values, although the aim was to build a portfolio of products that provided an almost guaranteed reasonable order value. “Most importantly, we had to create a very low-cost business allowing us to work with large suppliers to convert bulk product into EDI auto-replenishment and still supply to the market at the right price. This low cost also supports the business case for our small-to-medium suppliers,” he says. KEEPING IT SMALL Building a low-cost business isn’t easy however. But, by focusing intently on only carrying cost that adds direct value and by maintaining a small team,
We see ourselves as more of an ‘advanced delivery system’ to support suppliers and retailers
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Lectronic has achieved just this. Gartner sees the business as an extension of its suppliers’ operation, hence no marketing or direct sales team. EDI takes care of tracking payments, so no accounts team. As the team is small but highly-skilled, there is no need for low-level admin roles. In addition, from receiving an order to store delivery, none of the logistics systems need any human intervention and all deliveries to customers are carried out by third party providers. So how does this all work with clients both on the vendor and reseller side that range from innovative
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An end user makes a purchase and the system consolidates sales and re-orders all items sold. Orders are sent to Lectronic through EDI.
Product is picked, packed and labelled. Electronic information on the label is sent back to the retailer including the product, quantity and end destination so the parcel automatically flows through the supply chain to end up at the store replacing the product sold. Economies of scale are achieved as product is delivered from multiple suppliers to one customer, and all of the electronic trading and logistics is supplied nationally.
one-man bands to large multinational FMCG companies? A major pillar of the operation is that it has become an integrated cog in the supply chain mechanism – not merely an add-on. Understandably, Gartner baulks at being classified as a distributor, explaining: “We buy product to consolidate it into our warehouse, so we can be too readily described as a distributor. However, we see ourselves as more of an ‘advanced delivery system’ to support suppliers and retailers. “What we do is different, so we do have to spend some time reminding our suppliers that we are not the customer. Our goal is to work together for the good of the retailer.” Currently, the company is working on a new platform that will allow smaller customers access to some of the productivity improvements that EDI trading provides. Gartner believes that while the business supplies industry is changing rapidly – Australia is no exception and will soon have to deal with the launch of Amazon – Lectronic is set up to be flexible and that, as the industry changes, so too will Lectronic evolve as required.
INTERVIEW
Michael Reichhold
A
How is Paperworld reflecting the needs and wants of the business supplies sector? OPI finds out as the event returns to Frankfurt in 2017 with a forward-looking theme
shake-up in hall layout and a new show featuring the office of the future are two of the changes that visitors to Paperworld 2017 can expect this year. But the event also sees the welcome return of the biennial Plaza concept. OPI talks to Paperworld Director Michael Reichhold about the latest developments and his thoughts on how this annual fair can continue to reflect the changing nature of the business supplies industry.
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OPI: What’s new about Paperworld 2017? Michael Reichhold: For many years Paperworld has been very successful in bringing the two main pillars of the industry together under one roof: the commercial office products sector and the B2C stationery, writing instruments and school supplies categories. As such we’ve been able to reflect the largest possible range of stationery and office supplies in terms of both breadth and depth. This year’s Paperworld features a slightly modified hall layout that brings these two aspects closer together in one compact unit at the eastern end of the exhibition centre. It allows us to provide a more concentrated overview that reflects the changing market and which will further strengthen and emphasise this combination.
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OPI: How attractive will this new format be for visitors as well as exhibitors? MR: The new Paperworld structure gives greater emphasis to each product group and allows visitors to easily target those manufacturers that are relevant to them within a more compact area. The Plaza area in Hall 3.0 is the marketplace where to get comprehensive information about commercial office supplies as well as meeting the most important and leading manufacturers. Additionally, the new Future Office display in Hall 3.0 aims to give a preview of tomorrow’s world of work.
OPI: Please tell me a bit more about that. What can visitors expect from the Future Office? MR: Visitors will be able to see what tomorrow’s working world is expected to look like. It’s a world that is having to constantly adapt to different kinds of working relationships and cope with the increasing pace of digitisation. Consequently, the office buildings of the future will have completely new room concepts which will require entirely different types of products.
Visitors will be able to see what tomorrow’s working world is expected to look like
INTERVIEW Michael Reichhold
Attendees will be able to immerse themselves in tomorrow’s opportunities and needs, as well as discover these new innovative products. This part of Paperworld will be of particular interest to architects, interior designers, planners and facility managers who can gather ideas and plan for the future. It will also show manufacturers of stationery and office supplies how these envisaged changes in the workplace can generate new opportunities for their product development. During the show we will be offering guided tours of the dedicated displays and there will be a number of specialist lectures themed around the Future Office concept, coupled with specific product presentations. OPI: Business supplies resellers are increasingly diversifying away from traditional supplies into other categories such as cleaning, breakroom, safety products, etc. We haven’t seen any of these categories at Paperworld so far. What are your plans in that regard? MR: It’s true, the market is changing and everyone is trying to find a niche in which to specialise. The results of a recent study we commissioned demonstrates this and, of course, as a result trade fairs will also need to change. This shift in the market will be seen and felt at Paperworld as well. It’s the start of a process – often difficult and lengthy – that will continue for many years to come. We see it as an opportunity and are confidently looking towards the future. This year’s slogan ‘hello tomorrow’ reflects this and is a sign of things to come. OPI: The Paperworld Plaza concept was inaugurated in 2015. What are your hopes for it this year? MR: Commercial office supplies are the centrepiece of Paperworld. It’s only here that this huge product group is so comprehensively represented by both national and international manufacturers. The coverage Paperworld provides is unique in both breadth and depth. As such it’s important that the Plaza features exhibitors from across the entire office supplies spectrum and gives them the chance to showcase their new products and innovations. I believe we have achieved that and I’m convinced the Plaza will once again prove to be a major visitor magnet.
OPI: What continues to make Paperworld the ‘must-visit’ event for the OP industry? MR: Every major sector has its leading trade fair and for the OP industry that fair is Paperworld. It’s all about
Paperworld provides an opportunity to develop new synergies and contacts OPI: What are your expectations for the industry overall in 2017? MR: I believe that the paper, office supplies and stationery market will stabilise, but we’ll continue to see progressive digitisation in these sectors. However, I don’t see these two developments as incompatible, but more as two sides of the same coin offering huge opportunities. Change always brings new possibilities and we need to grasp these with both hands in 2017 and beyond. I’m excited about the future of this sector, rather than concerned.
February 2017
OPI: Paperworld Plaza only happens every two years. Surely the quantity and quality of exhibitors and visitors is therefore better during a ‘Plaza’ year? MR: We’ve not seen any change in quality or quantity. Even in years without the Plaza arena Paperworld is still a major source of information and a unique platform for the paper, office supplies and stationery sectors. But we’re constantly developing the event and the strengthening of the office area this year is an important step in that development.
seeing new things and being seen yourself, about networking opportunities and about introducing your company to a broader audience. It’s also a mirror where you can compare your own performance and achievements with others in the sector. Paperworld provides an opportunity to develop new synergies and contacts, and to take a fresh look at the sector, leaving behind well-trodden paths and moving forward. Put simply, it’s a trade fair that offers unique possibilities for inspiration and development.
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EVENT
OPI PARTNERSHIP
WORKING in
Partnership
N
ow in its fourth year, OPI Partnership has become the event in the European office products calendar that facilitates the coming together of leading vendors and resellers in our industry. At this three-day event, held from 7-9 March in Amsterdam in the Netherlands – again at the fabulous Hotel Okura – senior executives from established as well as emerging vendors in the ever expanding business supplies sector have the chance to spend time with Europe’s leading resellers. In confidential and strictly-timed meetings – to maximise the available time for all parties – participants have the opportunity to consolidate existing relationships and assess and develop new
We never expected the enthusiasm with which participants embraced this opportunity or the positive feedback we’ve had in actually helping companies grow
February 20117
ones, particularly in product segments that are still relatively new in our sector, including the whole emerging gamut of facilities supplies. In addition to strategic discussions in those meetings, there will also be plenty of networking opportunities. One of them will be OPI’s annual European Office Products Awards (for the shortlist and more information, see page 58) which will be held on 8 March, at the end of the first full day of OPI Partnership. Commenting on the continuous evolution of the event, OPI’s CEO Steve Hilleard says: “When we first launched Partnership in 2014, we knew there was a real need for this type of event where top-level executives from both the vendor and the reseller channels could get together in a completely confidential setting and either cement existing relationships or forge new ones. “But we never expected the enthusiasm with which participants embraced this opportunity or the positive feedback we’ve had in actually helping companies grow and enhance their businesses through attending Partnership. It’s been a revelation and we continue to strive to make the event better every year.” This year’s Partnership event is now sold out, but if you are interested in finding out more or to be considered for this invitation-only event in 2018, please contact Steve Hilleard on steve.hilleard@opi.net.
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EVENT
EUROPEAN OFFICE PRODUCTS AWARDS
And the
FINALISTS are...
W
ith the shortlist out for this year’s European Office Products Awards (EOPA), it’s shaping up to be an unmissable event. So join the good and the great of the European business supplies sector on 8 March when the winners of the 16th EOPA will be announced during a Presentation Dinner at the Hotel Okura in Amsterdam, the Netherlands, as part of OPI’s Partnership event.
Nominations for the 14 categories flooded in during the autumn of last year. They were condensed down to the shortlist during the judges meeting in Geneva at the beginning of December. Below is a reminder of who’s in the running for an award this year. On pages 60/61, you’ll find a short description of the all-important products in four award categories – showing the lifeblood of our industry and illustrating its innovation and diversity credentials.
For tickets to the EOPA Presentation Dinner, email awards@opi.net or go to www.opi.net/eopa2017. Please note that bookings for the EOPA are open to anyone, not just attendees of OPI Partnership which is now sold out.
EOPA 2017 SHORTLIST PRODUCT DEVELOPMENT OF THE YEAR l Brother International Europe – Mono laser all-in-one MFC-L6900DW l tesa – tesa Glue Stamp ecoLogo l The Navigator Company – Navigator Advanced l Trodat – The Trodat Professional 4.0 BUSINESS PRODUCT OF THE YEAR l Epson Europe – WorkForce Pro RIPS series l Fellowes – Privascreen Blackout Privacy Filters l Newell Brands – DYMO LabelWriter 450 l Pilot Corporation of Europe – FriXion range
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PRODUCT DESIGN OF THE YEAR l Bi-silque – Prime Glass Mobile Easel l Durable – LUCTRA FLEX l Esselte – Leitz Style Desktop Series l Fellowes – AeraMax Professional AMII Air Purifier l Matting – Jobmate Touch
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INNOVATION OF THE YEAR l 2020 Digital Media – 2020Pro l Acco Brands Europe – Nobo Nano Clean Steel Whiteboard l Brother International Europe – Brother QL-800 Label Printer series
l l
Fellowes – Lotus Sit-Stand Workstation Newell Brands – DYMO MobileLabeler
DEALER GROUP OF THE YEAR l Advantia l Calipage l Office Friendly l Soennecken RESELLER OF THE YEAR – REVENUES UNDER €100 MILLION l Commercial Group l iba l Streit Service & Solution l ZenOffice RESELLER OF THE YEAR – REVENUES OVER €100 MILLION l Amazon l Büromarkt Böttcher l Lyreco VENDOR OF THE YEAR l 3M l Epson Europe l Fellowes l Maped l Safescan
WHOLESALER OF THE YEAR Exertis Supplies l JGBM l Quantore l Relef-Centre l
PRODUCT VIDEO OF THE YEAR l Avery UK – Avery Labels and Design & Print l Esselte – Leitz Icon Labelprinter l HP – Spectre Laptop l Newell Brands – Discover Sharpie l Schneider – Slider Pen Series MARKETING INITIATIVE OF THE YEAR l Avery UK – Championing small businesses for the launch of Avery WePrint l Brother International Europe –‘It’s less work with wireless’ campaign for the P-touch and QL device ranges l Fellowes – ‘Keep it Confidential’ with The World’s Toughest Shredders l Office Club – Cool Earth paper l The Navigator Company – Around the World in 80 Pages Global Writing Contest YOUNG EXECUTIVE OF THE YEAR PROFESSIONAL OF THE YEAR INDUSTRY ACHIEVEMENT AWARD No shortlist – winners announced on the night
EOPA EVENT
PRODUCT DEVELOPMENT OF THE YEAR BROTHER INTERNATIONAL EUROPE – MONO LASER ALL-IN-ONE MFC-L6900DW Part of Brother’s all-new mono laser series, the MFC-L6900DW is a durable, robust mono laser machine designed for large businesses. The multifunction model is packed with practical features and is scalable thanks to its flexible paper handling options. It includes cloud functionality and a host of enterprise-level solutions.
TRODAT – THE TRODAT PROFESSIONAL 4.0 The new Trodat Professional 4.0 – in a convenient small size – addresses a number of customer needs, including easy and clean date and ink cartridge change. The solid metal construction and newly-designed handle, meanwhile, guarantee stability and durability with an appealing ergonomic design.
THE NAVIGATOR COMPANY – NAVIGATOR ADVANCED This new product in the Navigator range uses fewer natural resources as a result of its reduced grammage (75 g), combined with the usage of high quality virgin Eucalyptus globulus fibre (50%) and premium recycled fibres (50%).
TESA – TESA GLUE STAMP ECOLOGO The tesa Glue Stamp ecoLogo is fun to use and enables a faster way of working in time-pressed situations – the office being a good example – and meets the needs of heavy glue stick and glue roller users. Typical applications include the fixation of paper, pictures on paper and cardboard.
BUSINESS PRODUCT OF THE YEAR NEWELL BRANDS – DYMO LABELWRITER 450 An efficient solution for professional labelling, filing and mailing needs, the LabelWriter 450 saves time and money in the office. It can be connected to both PCs or Macs and print from a wide range of software programs.
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FELLOWES – PRIVASCREEN BLACKOUT PRIVACY FILTERS The privacy filters prevent people from reading on-screen data when viewing it from a 30° side angle. They are suitable for a wide range of formats and sizes, including desktop computers, laptops, tables and smartphones.
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PILOT CORPORATION OF EUROPE – FRIXION RANGE The use of thermal ink in Pilot’s FriXon range allows the easy correction of mistakes whether users are drawing or writing at work, home or in the office.
EPSON EUROPE – WORKFORCE PRO RIPS SERIES The core technology behind the WorkForce Pro RIPS multifunction business printers is Epson’s replaceable ink pack system (RIPS). This enables up to 75,000 pages to be printed without replacing the ink thanks to its super-high-yield ink supply units.
BI-SILQUE – PRIME GLASS MOBILE EASEL Contemporary and versatile, this mobile easel features a premium quality glass surface that never ghosts and gives a great writing experience. It can be used with any size easel pads and three sheets of paper at a time.
DURABLE – LUCTRA FLEX The LUCTRA FLEX is a cordless, portable, biologically-effective lighting solution for mobile working in the office or at home. It comes at a height of 136 cm and has an integrated battery that powers the lamp for up to nine hours.
FELLOWES – AERAMAX PROFESSIONAL AMII AIR PURIFIER This is a Fellowes air purifier for comparatively small public spaces such as washrooms, hotel rooms and healthcare consultation rooms where space is limited but the risk of airborne contamination potentially very high.
MATTING – JOBMATE TOUCH The Jobmate Touch provides a new way of working with an ergonomic mouse. The entire pad has a touch function that delivers a fast and direct feel.
EVENT EOPA
PRODUCT DESIGN OF THE YEAR
ESSELTE – LEITZ STYLE DESKTOP SERIES This is a high-end range of desktop accessories for the modern workplace, available in five colours.The focal point of the range is the LED desk lamp, operated manually or via a smartphone.
INNOVATION OF THE YEAR NEWELL BRANDS – DYMO MOBILELABELER This is a labeller for the on-the-go user – small, lightweight and portable with Bluetooth connectivity for quick and seamless set-up and high-resolution printing from a smartphone. It comes with the free DYMO Connect mobile app.
ACCO BRANDS EUROPE – NOBO NANO CLEAN STEEL W HITEBOARD
FELLOWES – LOTUS SIT-STAND WORKSTATION An integrated sit-stand workstation that responds to in-depth consumer research and promotes a healthy work lifestyle and wellness in the office.
2020 DIGITAL MEDIA – 2020PRO An advanced, cloud-based e-commerce solution and content management platform developed by UK wholesaler JGBM, 2020 Pro solves a wide range of digitisation issues for independent dealers.
February 20117
NanoClean is a new technology that creates a smooth finish on top of the whiteboard surface and which prevents pen ink from penetrating the whiteboard, ultimately preventing ghosting and prolonging the lifespan of the board.
BROTHER INTERNATIONAL EUROPE – BROTHER QL-800 LABEL PRINTER SERIES The first set of two-colour direct thermal label printers for office and home use.
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RESEARCH
PREVIEW: THE STATE OF THE OP INDUSTRY 2016-17
T
The VIEW from the TOP
he past 12 months have seen the global office products industry continue to change substantially. Overall demand for traditional OP is steady at best and in decline in many countries, and the need to venture into alternative product categories and services is becoming ever more pressing. E-commerce is firmly established as the dominant OP ordering method in many countries and Amazon is now widely recognised as a fast-growing player in this market.
Senior industry executives need a reliable yardstick against which to assess their own perceptions and strategies
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RELIABLE YARDSTICK In such turbulent times, senior industry executives need a reliable yardstick against which to assess their own perceptions and strategies. For the fourth time, Martin Wilde Associates (MWA) – specialist researchers to the global OP market – and OPI will be producing their annual research study, The State of the OP Industry 2016-17, which aims to be a ‘must-have’ authoritative sourcebook for the OP industry.
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The report investigates the OP markets in the US, Canada, Benelux, France, Germany, UK and Australia in detail and is based on insights and data collected from in-depth phone and online interviews with senior OP industry executives in those countries. It also comprises the 2016 financial performance of the key 15 OP distributors in the US and Europe, as well as the main industry events of 2016. The data gathered from these senior OP industry executives will aim to answer the following questions for each country market covered by the study:
• What was the value of the core OP market in 2016? • What are the core OP market growth trends in 2016 and 2017? • What will be the value of the core OP market in 2017? • What was the value of the addressable facilities supplies market in 2016? • What are respondents’ overall revenue and margin trends in 2016 and 2017? • What share of respondents’ sales are accounted for by jan/san supplies, breakroom supplies, workwear/PPE, promotional products and MPS in 2016 and 2017? • Which product categories are growing or declining overall in 2016 and 2017? • Which distribution channels won or lost in 2016 and 2017? • What are the shares of respondents’ sales in e-commerce and own label products in 2016 and 2017? • What share of the core OP market does Amazon now have, and which customers is it being most successful in capturing? • How will the OP industry look once Staples and Office Depot have divested? • What will be the effect of Brexit and the Presidency of Donald Trump in 2017? This authoritative industry-wide report is available for £850 (approximately $1,080) and will be available in April 2017. To order your copy, please visit www.opi.net/soti2017.
5 MINUTES WITH...
Gordon Christiansen CAREER Q&A
What’s your most prized possession? My cricket bat. It’s a custom-made bat from Millichamp & Hall in Somerset, UK. The bat is definitely better than the batter!
Describe your current job. Managing Director of Europe and SVP of Marketing for US-based sales and marketing agency Highlands. With a great team I’m helping to build the Highlands business here in Europe. I’m also responsible for corporate marketing and developing marketing strategies for our clients.
What would you be the patron saint of? Good manners, although apparently St Francis de Sales is already revered for this. Experience has told me that politeness and courtesy can get you anywhere. What’s your life philosophy? Don’t look back with regrets. What makes you happy? Family. Winning. Good wine. In business, it’s about creating win-win situations for my clients.
If you could have the answer to any question, what would you ask? Are we alone in the universe?
If you were leader of a country, what would be the first law you pass? A massive increase to the education budget. A good education is society’s greatest gift to the next generation.
In your spare time: couch potato or fitness freak? I enjoy doing lots of different things: TV, movies, live music, reading, keeping fit, walking, playing cricket…
If you could trade places with someone (dead or alive) for a day, who would it be and why? Any Australian cricket captain. Growing up I dreamt of wearing the ‘Baggy Green’ and to do that for a day would be awesome.
Your pet hate? People talking over each other. Dale Carnegie got it right – conversation is not a competition.
What would be a good theme song for you? Once in a Lifetime by Talking Heads. Ordinary is just so dull. What was the last gift you gave someone? A wooden rocking horse for my wife Sarah for Christmas, something she has always wanted. I bought one from Stevenson Brothers and it is beautiful, a real work of art.
Favourite season? Definitely the summer. Not much beats long, hot summer days. Where would you most like to visit and why? Easter Island. A fascinating story about human behaviour.
Your worst ever job? I left Canon for a financial services company in London, UK. I knew it was the wrong decision on my first day. What’s the best moment in your career so far? Being given the opportunity to be part of a fantastic product marketing department at Canon. It’s helped shape everything I’ve done in business since. The industry figure you most admire and why? There are many, but probably Eric Bigeard. The way he helped build Lyreco was impressive.
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What’s your worst character trait? Sometimes I can be a bit of a smart-arse. Some would say more than sometimes…
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What would you cook for a dinner party? I grew up in Australia so I’m pretty good with the barbecue. Surf and turf would be my ideal combination, maybe washed down with a cold beer or three.
Eric Bigeard
Your best piece of advice to someone who has just joined the OP industry? The way it was will never happen again. Learn new ways of doing business because there’s still plenty of it out there.
FINAL WORD
Let’s make a noise –
LIKE AMAZON
W
www.opi.net
e’re all well aware that we operate in a declining market, that digitisation is relentless and that, if we’re not progressive and up our game, we’re in trouble. So here’s to another year and another chance to get things right and make an impact. But how do we do that when the odds are seemingly stacked against us, particularly the smaller operators that often neither have the resources nor the expertise to make themselves heard? To my mind, the opportunities to grow for independent office supplies dealers in Europe are huge. You only have to take a look at what happened to Staples and Office Depot in Europe to see that there’s plenty of scope for the smaller players – now perhaps more than ever. But they have to start thinking ‘big’ and collaborate more and better.
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FLAUNT WHAT YOU HAVE It all starts with branding and drawing attention to what you do well. Take Amazon as an example: its proposition is not so very different from that of a conventional OP reseller. Perhaps my home market of the Netherlands is a bit different from some other countries in Europe in that digitisation is already really important and intense here, more so than in markets like Germany, Austria, France or Spain, for example. But in essence, Amazon ships the same office products at similar prices and conditions as the traditional OP dealers. Yes, they have a better online platform and everybody is giving them credit for this, but even those OP e-tailers that have a good set-up do not perform as well as Amazon. Why is that? Branding. Amazon is great at it. The press is eating out of their hands and constantly puts them on a pedestal. Ask yourself this question: what perception do customers have of independent OP dealers versus Amazon? I’d hazard a guess it’s quite often a negative one. For instance, we often refer to independent dealers as “traditional OP players”. Just by saying that, we subconsciously put ourselves in the losing team. It’s like asking the customer: do you prefer old and staid or new and innovative? What is the answer you are most likely going to get? And what is the perception customers have of Amazon in terms of assortment, price, service, experience and accessibility? By the same token, what is their perception of their office supplier’s – past or present – assortment, price, service, experience and accessibility? Do these perceptions actually match reality? I a m confident that the customer’s perception gap is vastly bigger that the reality gap. Because of branding...
Our job at Quantore – but the same essentially applies to all channel participants, wherever they are in the world – is to brand ourselves as part of a vibrant industry and to create a really positive customer perception. How do we do that? With the help of the press, Amazon has been creating a ‘self-fulfilling prophecy’ of a winning team that everybody wants to buy from. And the ‘traditional OP industry’ helps to fulfil this prediction by failing to reduce the perception versus reality gap and – like I said – by putting themselves in the shoes of the losing team.
Arnold Theuws, Managing Director, Quantore
Special Issue
FACILITIES SUPPLIES
Amazon has been creating a ‘self-fulfilling prophecy’ Special Issue Special of Issuea winning team FACILITIES FACILITIES SUPPLIES
SPREAD THE WORD Independent dealers – through their dealer groups and/or wholesalers – can be a big voice in their market. Quantore, for example, is the number two in the Dutch market in terms of combined dealer size, but historically we haven’t always promoted one big, cohesive message. This is changing. One big branding message and much much better communication are key. Everybody in the industry knows that independents are really strong locally – much Special Issue will ever be – but what more so than an Amazon is lacking is VENDOR an alignment to a strong, national SPECIAL brand and some good old-fashioned PR and exposure. What our biggest B2B dealers want the most, for example, is for their wholesaler, with its private label brand – Quantore – to engage in a large national television campaign. We have to flaunt what we have already. But we also have to communicate new and innovative ideas and services. Amazon has been doing that with a number of initiatives. Think of their drone deliveries that have been talked about for years – and they’ve only just begun to enter the test phase. It’s a PR initiative, but it’s certainly done nothing to damage Amazon’s image. So let’s make some noise and be on the winning team.
SUPPLIES
Special Issue
VENDOR SPECIAL NEXT ISSUE
Special Issue
VENDOR SPECIAL
Big Interview Jürgen Vent, Business Director, 3M Consumer Business Group, Western Europe Vendor Features l Vendor focus l Manufacturer rep groups l Spotlight: CEP Office Solutions Hot Topic Megatrends