OPI June 2015 EU by OPI

The word in office.

magazine

p26 OP(I) numbers:

Big Interview

Michael Brown, CEO, HiTouch Business Services p17

June 2015

Amazon B2B: third time lucky? p12

how are they stacking up? p54 All to play for in viscom p44 Gearing up for the NAOPA

Contents June 2015

www.opi.net

News

6 Round-up

Phipps leaves United; Swiss OP giants merge; Officeworks launches parcel service

Events 43 ABC Preview

Las Vegas beckons for the next SP Richards ABC event. Here’s what’s in store...

12 News Analysis

44 NAOPA Preview

Features

50 OPI Global Forum

All you need to know about this year’s NAOPA - and there’s still time to get involved

Amazon Business – a major threat to OP resellers?

Change needs to happen and happen quickly

17 The magic touch

HiTouch Business Services is on track to hit $300 million in sales this year. CEO Michael Brown discusses the group’s growth and explains why he thinks the Staples/Office Depot deal won’t go through

Category Analysis 54 Viscom

It’s a great time to be in the viscom space – that’s the consensus from all channels

60 Traditional OP

26 The numbers game...

Traditional OP sales might be down overall, but parts of the sector remain optimistic

As OPI celebrates its 250th issue, we crunch the numbers and look at the topics that drive our industry

34 When opportunity knocks...

Regulars 5 Editor’s comment

UOE breathes new life into UK post offices – and the OP retail sector

65 5 minutes with... Richard Scharmann

39 SOTI

The State of the OP Industry 2014-15 report is out and it makes for encouraging reading

“Many [manufacturers] are spectators these days. They must get into the game and seriously invest by reallocating capital into the IDC. But the world of independents and their groups too is changing fast and shrinking. Serious discussion regarding developing and implementing synergistic opportunities among independents is necessary.” ... For the full story, turn to page 26

66 Final word Jennifer Schulman

This month’s cover is supplied by Acrimet

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Editorial Editor Andy Braithwaite +33 4 32 62 71 07 andy.braithwaite@opi.net

Features & Production Editor Heike Dieckmann

Editor’s comment

+44 (0)20 7841 2950 heike.dieckmann@opi.net

News Editor Michelle Sturman +44 (0)20 7841 2942 michelle.sturman@opi.net

Sales and 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 Manager India Pride +44 (0)20 7841 2959 india.pride@opi.net

Events Events Manager Lisa Haywood +44 (0)20 7841 2941 events@opi.net

Production and Finance Designer Charlotte Gerhardt +44 (0)20 7841 2943 charlotte.gerhardt@opi.net

Production Assistant Jack Francis +44 (0)20 7841 2950 jack.francis@opi.net

Accountant Jairo Paya +44 (0)20 7841 2956 jairo.paya@opi.net

Publishers CEO Steve Hilleard +44 (0)20 7841 2940 steve.hilleard@opi.net

Director Janet Bell +44 (0)20 7841 2941 janet.bell@opi.net

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

From OP to WPS? As I write this, I’ve just got back from Chicago where OPI held its 2015 Global Forum. There was certainly an eclectic group of delegates from many different channels and markets (see page 50 for an event review), but many shared the same concerns about the current and future state of our industry. Let’s hope that the presentations, round tables and discussions that took place will be a catalyst for change – helping industry partners adapt and evolve to the changing market conditions is certainly a key role that we at OPI believe we can play. I know that I speak for all those who attended when I say thanks to the OPI team for putting together a great programme and a well-run event. And thank you, too, to all the presenters and delegates. The topic of conversation Let’s hope that the in Chicago – at least during presentations, round the official programme – tables and discussions invariably ended up going back to Amazon, especially that took place will be a with the Amazon Business catalyst for change launch so fresh in people’s minds. Check out Michelle’s News Analysis on pages 12-13 and further comments on page 14 to see what this could mean for OP resellers. Oh no! I’ve said ‘OP’! Obviously, that term is becoming antiquated in this world of workplace products and services. I’m not sure ‘WPS’ will catch on, but you never know! Believe it or not, this is actually the 250th issue of OPI. We’ve tried not to make too big a deal of it – we’re saving that up for our 25th anniversary next year – but in this month’s Special Feature (see page 26), Heike has spoken to a number of leading lights in the OP (WPS?) industry to see where they think we’re headed. Do you agree with their comments and predictions? Andy Braithwaite Editor

Office Products International Ltd (OPI), 2nd Floor, 112 Clerkenwell Road, London, EC1M 5SA, UK Tel: +44 (0)20 7841 2950

@opinews

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Phipps leaves News United Stationers from opi.net Wholesalers

Spanish Interaction member saves RP Diffusion Spain-based office supplies manufacturer, distributor and wholesaler Comercial del Sur Papeleria has entered the French market with the acquisition of RP Diffusion. French wholesaler and distributor RP Diffusion went into administration at the end of February. Comercial said a new company, formed from the acquisition, will be announced shortly. The new company will operate with almost 100 employees from two distribution centres in Caudebec and Saint Quentin, with its headquarters based in Paris. Like RP Diffusion, Comercial is a member of distributor network Interaction and will pick up the Q-Connect brand in France, along with all of RP’s customer base and the Rouge Papier stationery franchise with 500 stores. The acquisition expands Comercial’s reach across Europe to Spain, Portugal and now France. The company already has large distribution centres in Malaga and Guadalajara in Spain and has its own private label, Liderpapel, offering paper, office and school supplies. Comercial said the acquisition is a “decisive and crucial step” in its international evolution and also represents significant opportunities for customers. See opi.net for more on this acquisition.

Mergers & Acquisitions 6

OPI Magazine | June 2015

United Stationers is on the hunt for a new CEO following the sudden departure of Cody Phipps. The wholesaler said that Phipps had resigned with immediate effect “to pursue another opportunity”, which turned out to be the President/CEO role at healthcare logistics firm Owens & Minor. Phipps joined United in 2003 as VP of Operations and occupied a number of other senior roles – including COO – before taking over as CEO from Dick Gochnauer in 2011. He led a business transformation for United as the wholesaler reduced its exposure to core office supplies, most notably with growth in the industrial supplies, jan/san and breakroom categories, and expanded its digital capabilities. As part of this transformation, United Cody Phipps changed its corporate name to Essendant on 1 June. Taking over as CEO on an interim basis is board member Bob Aiken. Aiken rejoined the United board in February after previously serving as one of the company’s directors between December 2010 and May 2014. A three-person committee has been established to conduct the search for a new CEO, and United said the process would include a full review of internal and external candidates. Aiken is understood to be one of the candidates.

Mergers & Acquisitions

Static Control acquired by Apex China-based supplier of aftermarket printing cartridge chips Apex Microelectronics and Static Control Components (SCC) have announced a “strategic merger”. While the official statement stated ‘merger’, it is believed Apex has acquired a controlling share of SCC for $63 million, although the two companies will maintain independent operations, including retaining their own names. The firms said the deal will enable increased speed to market, higher service levels and expanding opportunities for the imaging aftermarket. Commenting on the move, rival Chinese print consumables manufacturer Print-Rite said it was “glad to see this kind of consolidation happening as a result of the strong stock market funding from mainland China” and that it hoped “the industry will be seen as more legitimate through this kind of M&A”. According to unconfirmed reports, Apex is also in the process of acquiring Seine’s print consumables business, which includes Ninestar. A Ninestar spokesperson was unable to comment on these reports at the time of going to print.

Switzerland-based buying group and wholesale organisation PEG and consumables distributor Ecomedia are joining forces. Together, the two companies said they will tackle the demands of the market proactively and offer dealers a complete portfolio of products. Ecomedia Chairman of the Board of Directors Peter Bühler said the new corporate group will open up opportunities in the market and create competence to actively shape the future. The combined management team at a strategic and operational level will be composed of the same executives of the two existing companies. However, PEG will operate under the name of Papedis and both businesses will fall under the umbrella of a holding company, OFFIX Holding, wholly owned by the current owners of both companies. The new group will have over 250 employees and annual sales of around CHF300 million ($327 million). PEG Chairman of the Board of Directors Christoph Clavadetscher said: “By joining forces, we are arming ourselves for the future and will be an even stronger partner and employer for our customers and employees.” For more details on this transaction, see opi.net.

Mergers & Aquisitions

Large Resellers

Staples makes acquisitions Staples has been on the acquisition trail with the purchase of Makr – an iOS app that enables people to design and print one-of-a-kind materials – and its parent company Happy. The reseller also acquired Accolade Promotion Group (APG), a distributor of promotional products in Canada. Makr enables businesses to design and upload logos to create custom branding materials such as business cards, packaging materials and stationery on iOS devices. According to Staples, the acquisition complements the updated online copy and print products and services, which now include a redesign of the site, the PNI open platform and print on demand. With regards to APG, Staples said the purchase will build on its position as the largest distributor of promotional products in North America and significantly expand the breadth of offering for its customers. Upon the deal closing, APG will become part of the Staples family and its Managing Director Dan Craig will become Managing Director of Staples Promotional Products (SPP) Canada. Pam Westman, the current Managing Director of SPP in Canada, will lead the integration of APG and spearhead global expansion for SPP in an expanded role. Staples did not disclose the terms and conditions of these acquisitions.

News n Round-up

Swiss OP giants to merge

News n Round-up

Large Resellers

Traditional OP

Officeworks launches new parcel service

Tullis Russell Papermakers placed into administration

Australian reseller Officeworks has launched a parcel delivery service, Mailman, with a flat rate fee for domestic delivery. Talking to OPI, Officeworks said Mailman is a “natural extension” of the products/services already on offer, and as such makes complete sense, particularly from a ‘one-stop-shop’ perspective. The reseller has teamed up with courier company Fastway to provide the service, which includes a flat rate for all Australian addresses, free parcel tracking and a signature receipt. If recipients aren’t available, they can collect deliveries at all Officeworks outlets or Fastway depots. Parcels can be posted from Officeworks stores at drop-off locations in store where parcels can be weighed and pre-paid labels can be bought (or purchased online beforehand) and printed. Officeworks said standard delivery will be 1-2 days between most major cities, with parcel protection insurance available if required. For metro deliveries – meaning selected areas of Brisbane, Melbourne, Geelong, Perth and Sydney – same or next-day delivery is available. The company told OPI that currently Mailman is only for domestic parcel delivery, but there may be the opportunity to expand the service to include international delivery in the future.

UK manufacturer Tullis Russell Papermakers has been placed into administration by its directors after they failed to sell the business. The company said a 40% decline in demand coupled with higher price levels for its primary raw material has led to its papermaking subsidiary based in Markinch, Scotland, no longer being a viable business. In addition, the collapse of PaperlinX UK, the firm’s third and most profitable customer, made its “difficult position finally untenable”, according to Tullis Russell Group CEO Chris Parr.

Large Resellers

Staples signs strategic partnerships in EMEA Staples has entered into partnerships with leading South African office supplies retailer Waltons and Romania-based OP reseller Dacris. The global giant said the partnerships will enable customers with a worldwide presence to extend their global procurement programmes through a single-source solution. The agreement with Waltons is particularly interesting as the South African firm has been – or had been – Lyreco’s strategic partner since 2006. Waltons has been undergoing a restructuring process recently as it tries to deal with challenging market conditions. Presumably, Waltons Managing Director Dave Jenkins sees more potential business in a tie-up with Staples, as at the start of 2014 he described the business derived from the Lyreco partnership as “not significant” (see Big Interview, OPI March 2014). Former European Office Products Awards winner Dacris is Romania’s second largest OP player with sales estimated of around H20 million ($22.5 million). According to Dacris, the exclusive partnership with Staples will enable the company to diversify into more

OPI Magazine | June 2015

product categories as well as provide customised solutions in terms of technology. In the company blog, Dacris founder Dan Fati said: “Staples wanted further expansion in Eastern Europe with a reliable partner that can provide professional and innovative solutions, and Dacris was the natural choice.” Christian Horn, SVP at Staples Advantage Europe, added: “Our goal is to help our customers consolidate spend by allowing them to purchase everything they need from a single source.”

News ■ Analysis

Third time lucky? Amazon has launched its B2B marketplace Amazon Business – essentially a revamped and souped-up version of Amazon Supply. Does it represent a major threat to the OP channel?

TECHNICALLY,

this is the third B2B attempt from Amazon, its first foray into the market being the 2005 acquisition of science equipment supplier SmallParts.com, which subsequently morphed into Amazon Supply in 2012. Amazon Supply, despite having 2.2 million products on offer, never really hit the mark with business suppliers or purchasers due to fundamental functionality and capability issues such as specific business pricing, quantity discounts and different payment solutions. The launch of Amazon Business, however, signals the online giant’s serious intentions in grabbing a slice

pricing transparency by allowing buyers to compare product costs from multiple sellers, which may make some suppliers think twice before joining.

“The new B2B portal is ‘closing the gap’ between what Amazon does and what independent dealers do in terms of some services for the end user” of the US B2B e-commerce market that is expected to be worth $780 billion this year, reaching $1.3 trillion in 2020. For the majority of the office products industry, the writing has been on the wall now for some time. “They’ve been trying to understand our channel for a while, but as good as Amazon is, they use predatory pricing practices to gain market share, and we cannot underestimate this,” Independent Stationers CEO Mike Gentile told OPI. Amazon has also proven time and again that it is prepared to lose money on new ventures in order to gain knowledge first, then market share. The new portal now allows for bulk discounts, multi-user accounts, and has upped the product selection to 250 million products – just some of the benefits to tempt the B2B market (see box ‘Amazon Business fast facts’). However, like Amazon’s consumer site, the B2B portal will also create

OPI Magazine | June 2015

Amazon Business VP Prentis Wilson would not be drawn on whether it will launch Prime for Business or a loyalty programme. Similarly, he wouldn’t comment further on the launch of the portal internationally,

other than to say a pilot scheme was underway in India (see box ‘Amazon responds’). The consensus, however, is that international sites and some form of Prime will roll out eventually. Unlike its predecessor, the new B2B portal now includes a marketplace for third-party sellers and the company is actively courting sellers with a number of initiatives, including a Business Seller Program and its Fulfilment by Amazon service. Seller profiles with the ability to add credentials – small business, women-owned or minority-owned, for example – that will be displayed to business customers have also been added.

Amazon Business fast facts •

Business-only pricing on select items with quantity discounts available. Only registered business account customers will have access to the prices.

•

Access to a corporate credit line with pay-in-full credit aimed at large businesses, schools, government entities and a revolving credit line designed for SMBs.

•

Free two-day shipping on eligible items and orders of $49 and above for those products sold/fulfilled by Amazon. Faster shipping options are available.

•

A single or multi-user business account is available with an administrator who can edit users, payment methods and shipping addresses. Administrators can also set up workflow approvals to control spending, enable groups and manage tax exemption.

•

A multi-seller marketplace that enables users to view multiple offers on a single product page for price comparisons.

•

A customer service offering that enables vendors to answer questions from buyers.

•

Integration for third-party procurement solutions allowing punch-out capabilities.

•

Sellers that meet the performance and service requirements will be prominently featured to business customers.

Opportunity, not threat Some in the OP industry will see Amazon Business as an opportunity, rather than a threat. And, as wholesalers and dealer groups have been saying for some time, the way customers are buying business supplies is transforming. Innovative Office Solutions CEO Jennifer Smith told OPI that the launch is a further reminder to the independent dealer channel that B2B distributors have to take note of the changing marketplace and evolve with the times. “People have good online experiences at home and expect similar features and functionality when they come to work. This challenges B2B companies to recognise these expectations and meet them. We all must invest in technology and the customer experience,” she added. TriMega President Mike Maggio agreed, saying that there will come a point where customers will simply deal with just one supplier. Both Gentile and Maggio believe this is a wake-up call, and that now is the time for the industry to band together and speak as one voice. “Dealers have to get closer to their customers and get the value proposition right in terms of service and responsible pricing. The market share shift will be based on dealers and their core competencies and value-add,” warned Gentile.

News ■ Analysis

Clearly, while the launch of Amazon Business is likely to touch everyone in the OP industry in some way, it will be felt most acutely by the likes of Staples and MRO resellers such as Grainger. As Guernsey CEO Dave Guernsey pointed out: “The new B2B portal is ‘closing the gap’ between what Amazon does and what independent dealers do in terms of some services for the end user.” However, Guernsey also believes that Amazon has a way to go: “Every step they take towards matching the services that businesses require of their vendors, the more Amazon adds to its cost structure and the more difficult execution becomes.” This will be especially true when trying to compete with specialist suppliers or those that offer large or heavy equipment, for example.

Amazon responds... OPI asked Amazon Business VP Prentis Wilson a few questions about the new Amazon Business (AB) service: EXCLUSIVE

OPI: Have you appointed sales people for Amazon Business? If not, how will you be marketing/selling it? Prentis Wilson: As a company policy, we don’t share that information. However, we do have both self-service registration and an account team approach.

Prentis Wilson

OPI: What is the timeframe for rolling AB out into other markets? PW: We always look for ways to replicate our offerings across our sites. In India, we have launched AmazonBusiness.in as a small, invite-only pilot serving a limited number of businesses in Bangalore. We are currently focused on managing the pilot effectively and efficiently and cannot comment on any future plans. OPI: What percentage of products will be offered by Amazon versus third-party resellers? PW: We don’t disclose specific figures. However, in 2014 alone, more than two million sellers used the Amazon platform to sell more than two billion units to customers. With the launch of Amazon Business, sellers now have the opportunity to grow their B2B sales by reaching registered business customers. OPI: How many products are currently available through AB? PW: Amazon Business provides easy access to hundreds of millions of products – everything from IT and lab equipment to education and foodservice supplies – as well as business-only selection. OPI: How will delivery be handled? PW: The Fulfilment by Amazon (FBA) service is available to assist in meeting rigorous delivery requirements expected by business customers. OPI: Are all third-party sellers required to use FBA? PW: Sellers on Amazon will have their offers available to business customers on the Amazon Business platform. Amazon recognises a subset of sellers that consistently deliver outstanding service to business customers on Amazon. These sellers are identified as ‘Business Sellers’ and are able to offer additional features that are optimised for B2B transactions, such as quantity discounts and business-only offers. OPI: The current OP industry standard is next-day delivery. Are you comfortable with the AB two-day shipping? PW: We offer free two-day shipping on orders of $49 or more on tens of millions of eligible items, plus access to even faster shipping options. OPI: Are there plans for an AB loyalty programme or AB Prime? PW: We don’t comment on our future roadmap. OPI: Are suppliers already registered with Amazon Marketplace automatically registered with AB? PW: We reviewed detailed performance metrics amongst sellers that offer the type of selection customers want – sellers that held themselves to an exceptionally high standard in shipment and order fulfilment were extended an early offer to enrol in Amazon Business. There are options for new sellers interested in the Amazon Business Seller programme. Sellers currently selling on Amazon that support business-level performance can sign up via their existing Amazon Seller central account. OPI: How do you see e-commerce, the Internet of Things, mobile, etc, affecting buying habits in the future? PW: The ability to better serve business customers is significant for Amazon. We have more than 278 million customers, millions of which are already making business purchases. With the launch of Amazon Business, we have an opportunity to change the way businesses make purchases. We think this is an experience that businesses will love and a great opportunity for manufacturers and sellers to reach registered business customers. It’s only the beginning for this new marketplace – we will continue to build out features in areas like technical support, payments, shipping and pricing.

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News ■ And finally...

1991

Comment

E-commerce becomes possible as the internet is opened up to commercial use

2020

Amazon recently launched its biggest push into the B2B business supplies marketplace yet with Amazon Business – an upgraded version of Amazon Supply. OPI asked what the implications will be for the OP industry. Below are some of the responses (for a full analysis and an exclusive interview with Amazon Business VP Prentis Wilson, see page 12). Amazon is far better positioned to succeed in a B2B environment than Office Depot and Staples were. Both had retail business models that were very inefficient when it came to B2B for numerous reasons. But I don’t think Amazon can have a successful B2B business without feet on the street, as relationships are the initial drivers of business decisions. Amazon may be extremely successful with SMBs, but will struggle with larger commercial/contract accounts without field support. Mike Bickle, Sales Rep, inVentiv Health Amazon seems intent on being successful in business supplies – whether with this version or later – so will in my view become a huge (US) player in the next few years. Ironically, a key defensive strategy will be to have a retail network. Andrew Penfold, Owner, Penfold Research

Expected US B2B e-commerce sales will be $1.13 trillion

1991

Average mobile penetration per country in the world sits at 0.4%

2014

Global mobile penetration reaches 93%

1991

The floppy disk is able to store 120MB of data

2015

External hard drives with 1TB of data are standard, with 5TB drives available

TWEET CHAT follow us on Twitter @OPInews, @andy_opi

@Staples Someone brought treats. So much for winning the office weight loss contest. #officelife @MStationers Mobile ‘facts’ include unlocking phone 900 times a day, loss of phone anxiety and 68,000 lamp post collisions. Fun! @FortuneWeb Bet you never thought about using @postitproducts like this! #EyebrowsOnFleek #OfficeDog @swervytoon Roots of our industry in 14th century, but stationery not dead yet, it’s being reincarnated as ‘workplace’ #OPIGF2015

SNAP SHOT To celebrate OPI’s ’s 250th issue, here’s a mishmash of the ‘trendiest’ brands and topics around when it was first launched in 1991. How many do you remember?

Amazon’s entry into B2B is the exact premise that will allow government approval of the Staples/Office Depot merger. Because of that, the retail landscape is going to go through another transition – perhaps into e-commerce kiosks in traditional bricks-and-mortar locations. Lee Klose, Owner, Klose & Associates The industry will be in for a rude awakening when every dealer in the US will be forced to match pricing from Amazon (it’s already happening). At this point, most small-to-mid-sized dealers can’t and shouldn’t try to compete with Amazon. There is value in what an independent offers, but the flip side of that is that customers don’t care. It’s all about price and the independent is expected to compete with Goliath companies and still give that service. Maybe the wholesalers should get involved and stop overcharging dealers. Neil Weill, National Account Business Development Representative, Independent Stationers Governments – state, local and federal – are paying independent dealers’ competitors to put them out of business and using their money to do it with. Amazon gets millions of dollars in tax breaks for locating warehouses – routinely called ‘sweatshops’ – in depressed areas. This is political favouritism at its finest. This is the number one problem facing independents – not the wholesalers, buying groups or the manufacturers, but the governments. Rick Marlette, Co-owner, OPSoftware

OPI Magazine | June 2015

opi.net poll results What is the most important purchasing factor for B2B customers?

Quality 40%

Easy-to-use website 10% Multi-user accounts 7% Product range 5% 12% Desktop delivery Speed of delivery 7% Price 19%

HiTouch Business Services | Big Interview

The magic touch

HiTouch Business Services has grown into a multi-division products and services provider that is set to exceed $300 million in sales this year. OPI speaks to CEO Michael Brown…

IT’S

been almost five years since Howard and Michael Brown – who had made Allied one of the most successful dealers in the US before selling it to Office Depot in 2006 – returned to the OP industry with the acquisition of MyOfficeProducts (MYOP). MYOP is just one facet of a fast-growing portfolio of companies that are grouped together under the HiTouch Business Services banner. These include the Rentacrate and ShredX businesses that had been set up prior to the MYOP acquisition, and new divisions such as IT Simplify, designWorks and MyOfficeInnovations, as HiTouch morphs into, as its name suggests, a group that offers a broad service proposition to its business customers, helping to differentiate it from the competition and gain traction in large accounts. With Howard acting as Chairman of the group, his son Michael has overseen the development of HiTouch over the past five years in his role as CEO. As he tells OPI, there is still plenty of room for growth and opportunities to be had from big-box consolidation. OPI: Perhaps you could start with a rundown of the main developments at HiTouch over the past five years. Michael Brown: When we bought MYOP in November 2010 it was doing around $125 million in revenue, but the issue was that it had no density. It was a non-stocking dealer and our job was to try and build up certain markets where there was potential for growth. So, where we had Rentacrate facilities, for example, we could combine them and create regional distribution centres where we could stock – crates, shredding, office supplies, anything and everything we do – and build out that hub-and-spoke model.

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Big Interview | Michael Brown So, over the past five years we have done about 15 acquisitions on the office supply side in different markets – a lot of them in Florida, Texas, Alabama, a couple in Washington DC – which then led to us having seven 50,000 sq ft-plus (5,000 sq m) regional distribution centres (RDCs) stocking 3,000 products. These are located in Tampa (FL), Saddle Brook (NJ), Baltimore (MD), Hayward (CA), La Vergne (TN), Chicago (IL) and Dallas (TX). They then supply in a hub-and-spoke model 24 other cross-docks, which has allowed us to really cover the US and build some density – although we do use some third-party distribution in some markets. If you take Florida, when we bought MYOP they were doing $5 million in office supplies; now they are doing about $40 million. So, on the OP side in the past five years it’s been about trying to build density, becoming a stocking dealer and building out that footprint to service all of our customers. Then there has been a major focus on launching some new brands in the services area, and integrating all the companies onto one operational platform with seven different selling platforms. So it’s been about acquisitions and organic growth.

It’s not that we wouldn’t do an acquisition in the north-east, but it would have to be the right one. We did four acquisitions in the Washington DC market, but didn’t do any in New York because we didn’t feel that there was anything attractive. But I don’t think we’ll be buying an office supply dealer in Massachusetts! In the north-east you are just trading accounts on a daily basis. OPI: Do you think there is a similar DNA between MYOP & WB Mason? MB: They are two different companies. I have a lot of respect for WB Mason and how they grow. They add anywhere between 60-100 sales people every year and they have a very regimented and replicated model of customer acquisition, with sales people, the price books and so forth. While on the OP side we do have that additional legacy rep, old-style industry relationship, we also have a lot more in what I’d call the enterprise side. WB Mason and we are very different in how we go out to market. WB’s density and concentration is great, the delivery and emphasis on the driver’s relationship with the customer is great and I think its customer service is great; it’s a model that works for them. For us, that hunter/farmer type model is not something we do today, although that would probably be the next wave. You make an acquisition, have an RDC and now can go out and have this hunter/farmer model in certain markets. That’s something we actually did years ago in Tennessee to gain density around our distribution centre and be successful, but we then turned it all back into inside sales and moved into another direction.

“I don’t think we’ll be buying an office supply dealer in Massachusetts!”

OPI: Is your distribution footprint where you want it to be? MB: No, we’re going to continue growth in distribution. The Texas market would probably be the next RDC we enlarge; currently we only have a 25,000 sq ft facility there with about 500 products and we would like 3,000. We’re looking to grow that market because we have a lot of business in Houston and Dallas, not just in OP, but also on the Rentacrate side. Chicago is another market where we have a stocking facility, but it’s not a large enough regional stocking facility, so we’re looking to build that out, too. OPI: So you’re looking to grow in areas where WB Mason doesn’t have a strong presence? MB: (laughs) We do have distribution in WB Mason areas, like New Jersey – which services the tri-state – and smaller facilities in Massachusetts and Pittsburgh. In the case of WB, it’s not that we necessarily avoid the geography they are in, it’s really what we have purchased with MYOP, which was not in the north-east at all.

OPI Magazine | June 2015

OPI: Why did you do that? MB: When we bought MYOP – which was itself a roll-up of many acquisitions – each sales person could probably count 700 customers, with 50% of them dormant and the 80/20 rule with lots of smaller customers they never called on. So we built an inside sales team and took the number of accounts down from 700 to probably 60-100 that the reps would physically call on. This allowed us to take those smaller customers and put them in inside sales. We want our sales people more focused on maintaining and cross-selling current larger accounts and opening up new, larger accounts, and this allowed them to do that.

Big Interview | Michael Brown So now we have about 80% of customers being handled by inside sales. OPI: What is the size of the sales team? MB: Nationwide, we have a little over 180 sales people. Inside, we have about 25-30 focused on that traditional, transactional OP-type business, although they also do some furniture and what we call MPS ‘light’. OPI: How do you think the market has changed in the past five years? MB: I see that everyone has gravitated towards… I don’t want to say a ‘me too’, but the OP industry went and annihilated the office coffee industry and now it wants to do that to the jan/san arena. A lot of this is staving off the inevitable in different people’s cases, but from a competitive standpoint, the big change to me is not a ‘who’, it is the technology. It is the fact that in more and more industries there are fewer people working in an office, there is less need for OP and more need for technology than anything else. The Fortune 1000 companies have been shedding real estate, going more to a hotel modelling situation and everyone’s becoming more and more mobile. So while the products are being bought per se, they’re just not coming into the contract stationer. I can either a) wait to be irrelevant or b) try to get ahead of the game and try to become more of a multiple services provider than a transactional provider. OPI: It’s been difficult for OP dealers to compete in this technology space. MB: They’re not even there. OPI: Are you there? MB: We’re there because we have a separate company to make sure we’re there. If I take HP, for instance, I have a managed print services division which is a certain certification that allows for certain pricing, and you have to stick to that within that area. Then I’ve got the transactional OP and then, in the IT Simplify division, I’m selling laptops and other enterprise and managed services. I’m talking about areas like the cloud, IT hardware, IT software for things such as asset management, space utilisation studies and conference room reservation software. We have engineers on staff who are certified with Cisco, Apple, HP, Lenovo, networking, enterprise solutions, document workflow, etc. Our old strategy was to be branded at Allied as one. Our new strategy, with wanting to be in all these businesses – and to make sure the manufacturers know we were committed to all those – is to have these separate selling

OPI Magazine | June 2015

entities that have their own business leaders and who just focus on that piece, and that is very helpful. OPI: How did you perform last year? MB: In 2014 we did around $270 million. We have a budget of over $320 million for this year, and in the first three months we were 9% ahead of that budget. OPI: What percentage of total business is done by each of your divisions? MB: MYOP is 60-65% of overall sales and that includes our educational product sales; Rentacrate and ShredX together are about 5-10%; IT Simplify is about 8-12%; designWorks, which is our Grade A furniture business, is about 6-10%; and then we’ve got an e-commerce operation – branded as MyOfficeInnovations – that makes up about 8-12%. From an organic perspective MyOfficeInnovations has been doubling in size each year for the past three years; IT Simplify has done the same for the past two years. Overall, the company has been growing 20%-plus every year. OPI: Can you say something more about MyOfficeInnovations? MB: MyOfficeInnovations is our B2C model and helps us move inventory; it brings in great volume, great cash flow and gets us into automated business. We have proprietary software that was written; and if I say that tomorrow I want to sell $200,000 of this product, it combs the web, tells us what price we need to be at, and it’s a pretty good indicator of what we need to do. So if I have got heavy inventory on a certain product and I want to relieve that product, I can do so. It’s about leveraging distribution centre capacity. I’ve already got all the infrastructure in place, so for me to post anyway, either on my own site or someone else’s third-party site, it’s nothing. Most people today who are buying that way are buying on price, so I can fulfil that need without really doing anything except picking and packing. I only have to use technology from the sales and marketing side; I’m just a fulfilment person. OPI: It sounds like it’s doing around $30 million, which is not a number to be sniffed at. MB: And we should grow by over 10% this year. OPI: What are the cross-sell opportunities between the different divisions? MB: They’re tremendous. If you look at our IT Simplify business, for example, 40% of our

“There are fewer people working in an office, there is less need for OP and more need for technology than anything else”

revenue last year came from our existing customer base. Rentacrate deals with Fortune 1000 and very large companies and it has been able to gain business for IT Simplify, coffee, office supplies, etc. I have two Presidents: John Frisk, who was the original President of MYOP, and Joe Aiello, who was the original Head of Sales at Allied – he takes care more of the services business while John takes care of the transactional, OP side of the business. The two of them are working together as co-Presidents on pretty much a daily basis on initiatives to penetrate each other’s customers. OPI: What other services have you developed? MB: The interesting thing is that the services industry has such a long selling cycle. In 2004, we launched MPS and we were way ahead of the curve then. We became the exclusive North American dealer for a software solution called Condeco a year and a half ago, and it’s been a similar situation – we would get an appointment but we couldn’t really sell it. Today, because of what’s happening in the real estate market and people getting rid of real estate, we have 3-4 presentations a week that we are making on a nationwide basis and it’s a challenge keeping up. It took virtually two years to get that going. When it finally gets into the system – and it will probably be nearer the end of 2015 – it will all be recurring buying and incremental revenue. w w w.opi.net | OPI Magazine

HiTouch Business Services | Big Interview OPI: What is this software exactly? MB: Condeco is used for conference room reservations, hotelling, looking at the utilisation of desks and being able to right-size your footprint and optimise your space. When we’re pitching a furniture job, the software is part and parcel of that. OPI: You said MYOP is more than 60% of your business. Where do you think that number will be in a few years’ time? MB: Depending on what happens in the market, it could continue that way. Right now, we’re seeing tremendous success in the IT solutions business – and that’s organic growth, penetrating our existing customers, so that could be a runaway for us like Keurig was a few years ago. We’re always going to be in OP, but in a lot of cases, it’s just paper and toner. In what people call the traditional OP market, I can tell you we don’t sell certain products anymore. But other than that everything’s pretty good. OPI: What do you think of the proposed Staples/Office Depot merger? MB: It makes for a very interesting time in the industry but, personally, I don’t believe it will happen. OPI: Really? MB: Number one, the Comcast/Time Warner thing didn’t help them [Editor’s note: the merger was blocked by the antitrust authorities]. I think it is very clear that in the Depot/OfficeMax merger, the FTC cited Staples as a competitor, but now who’s left? Theoretically, if the merger was to happen – which, again, I don’t think it will – Staples would control almost all of the Fortune 1000 customer accounts. Number two, the big issue is that with the larger accounts, and even some of the larger medium-sized ones, there is no one else that can write the prebate cheques that are required to win the business in these accounts. We can feasibly write a couple, but the big boxes are writing anything between 8-15% of sales up front to get that business – there’s no one else that can afford that. OPI: So you think the FTC will impose conditions or requirements? MB: If that were to happen, we see tremendous upside because a) if there were a spin-off of an asset we would be in the market to buy it and b) we would be the only other national footprint with sales people to be able to compete against Staples; there always has to be a number one and a number two…

‘We would be the only other national footprint with sales people to be able to compete against Staples” OPI: Someone like AOPD might disagree with that line of thinking. MB: I hear you, but – and nothing against AOPD – I think they would have a hard time competing against us or Staples in front of the customer. In the larger, national customers, it’s not a traditional sell; it’s like doing an acquisition: there’s computer integration, standardised pricing, rules that have to be put in place for every market, etc. Then, within certain markets you might have to provide specific services that you need to offset in other markets. For example, if I have to do pantry put-away in the New York City market that means I lose money there, but I don’t have to offer that service in other markets, so overall I’m making money. I think that would be a harder thing to make happen with the AOPD model. Look, to get a Fortune 1000 company you need big money; it would be a big leap of faith for that Fortune 1000 company to w w w.opi.net | OPI Magazine

HiTouch Business Services | Big Interview say: ‘OK, I’m going to give this vendor $15 million of business when they’re only doing X amount of business in total.’ So it’s just the financial wherewithal to handle all of that, and I don’t think anyone [in an enterprise purchasing department] would get fired for choosing Staples. OPI: What would a Staples/Depot merger mean for the wholesaling channel? MB: Personally, I don’t think it would be a game-changer. I don’t think Staples would go with one anyway; there’s a place for both of them, especially during the integration phase, with moving everything around, etc.

MB: I’m personally not afraid because we keep diversifying out of the price/ transactional model. If I were an independent dealer in a particular marketplace – and especially in a high-visibility marketplace – and I had the legacy-type reps who are big earners, I would be very nervous about WB Mason, Amazon and about whether this Staples situation happens. Very nervous. In a lot of cases, these guys could go in at 50 below zero and wipe out a $20-$30 million dealer – which in this industry is a good-sized dealer – in a minute, because it’s all transactional and it’s all price. We’ll see. But I do believe that getting into the more sophisticated accounts and at the same time making them feel as though they are important customers that are tied into upper management, then that’s our bread and butter, even in the Fortune 1000. In fact, I’m flying down to a customer next week; we just do coffee with them on a nationwide basis and I’m going down there specifically because it’s a ‘thank you’ visit, a ‘what else can we do for you’ opportunity, given what else is going on in the marketplace with Staples and Depot. I don’t think there are too many CEOs who are jumping on planes to get in front of the customer.

“These guys could go in at 50 below zero and wipe out a $20-$30 million dealer […] in a minute”

OPI: What did you make of the recent Amazon Business announcement? MB: We’re very big partners of Amazon. We do a lot of business with them as a third-party exchange and we also do a lot of business with them in other areas that are not just OP. OPI: For example? MB: My family are investors in a toy company called Alex Toys. Last year, in a three-week period during the fourth quarter, we sold $2 million worth of toys on Amazon. Now, it’s a distribution play; I have no sales people. To be able to sell toys on Amazon, you have to be integrated and have certain ratings, so we’re doing both their FBA [Fulfilled By Amazon] business and looking geographically in areas with them where they want to do B2B. I’m actually going to meet with Amazon in Seattle shortly. OPI: What could this Amazon Business platform mean for office resellers? MB: It’s interesting. When you read the announcement, they’re talking about two-day delivery; I don’t know if that works. I know that Amazon has hired sales people. If they can execute correctly, they can be a real transactional killer. If they went with the MYOP model, the B2B model, I think they could clean house. OPI: Which is what everyone’s concerned about. What’s stopping them?

OPI: We haven’t mentioned your father. How is he doing? MB: My father is great! While he spends some time in Florida, he is extremely active, especially on the OP side. Let there be no mistake, there is no one that has the passion for our industry and our business than my father – it’s in his blood. He’s in front of our customers, the manufacturers, the wholesalers, acquisitions and the employees. That’s why we have had great success: while he is focused on the traditional business, I’m building out the services end of our business. OPI: What is your strategy for the next 18 months to two years? MB: There are two paths we are going along. One is to continue to make acquisitions, to grow organically, to cross-sell and to continue to achieve more density. At the same time, whatever happens with this [Staples/Office Depot] merger could dictate a major move for us if there is a spin-off requirement. w w w.opi.net | OPI Magazine

Special Feature | 250th Issue

The numbers game… by Heike Dieckmann heike.dieckmann@opi.net

WORDS

are the best way to tell a story, but sometimes numbers tell the same story a lot quicker. So here’s a little synopsis of what the business supplies sector is facing today. • • • • • •

• •

$780 billion – the US B2B e-commerce market today $89 billion – Amazon’s 2014 revenues $39 billion – estimated sales of a combined Staples/Office Depot $24 billion – the size of the global cleaning industry $4 billion – the size of the US breakroom industry $40 milion – the loss in sales ACCO incurred in 2014 due to the Office Depot/OfficeMax merger 15-35 – the age group resellers need to address and impress 11 – the chapter more resellers/ manufacturers will be entering if they don’t embrace change 5-8% – the estimated fall of traditional OP sales year on year 0 – the number of pureplay OP wholesalers left in the UK OPI Magazine | June 2015

This month OPI is publishing its 250th issue – cause for celebration. Aside from a brief trip down memory lane, we’ve been crunching some numbers to see what the future might hold

There are plenty more figures, of course. Indeed, in a straw poll of industry executives, asking them what the most pressing issues are today, one number that repeatedly came up had to do with currency devaluation. While the euro has sunk to a 12-year low in value against the US dollar, the Australian dollar isn’t faring any better, having lost around 20% of its value, much of it in the last few months. But this needn’t be a negative, says Gavin Ward, CEO of Australian dealer group Office Brands, due to another important issue – pricing. “The devaluation of the Australian dollar is causing a significant change in pricing in the market. I believe customers are aware of the fact that prices need to increase. But the important thing is that everybody does it and that we have price collusion in Australia. Nobody can afford to take these percentages out of their margins these days. We all have to creatively work with our customers to increase pricing

to maintain profitability, so I’m hoping that this is a great opportunity.” EVO Group CEO Robert Baldrey also mentions pricing as one of the big issues the industry has to get right (see box, right), particularly as end-user prices are getting more transparent in this digital age where Amazon or Amazon Business even (see News Analysis, page 12) is becoming an ever-bigger elephant in the room.

Amazon/Staples/Depot threat On that note, when OPI and Martin Wilde Associates carried out their global research for The State of the OP Industry Report 2014-15 (for a summary, see page 39), there were two issues that came up more than any other when executives were asked to name the events that would have the greatest impact on the future OP industry. One was Amazon and its continuing march into the OP space, the other a successful/approved merger of Staples and Office Depot.

250th Issue | Special Feature Mike Gentile, CEO of Independent Stationers, breaks down the challenges and opportunities associated with those issues – and others – at a channel-specific level. Wholesalers: “They need to clearly identify their strategic channel and their customers, and then develop synergistic programmes with channel partners to facilitate market-share growth.” Manufacturers: “Many are spectators these days. They must get into the game and seriously invest by reallocating capital into the IDC.” Independent dealers: “The world of independents and their groups too is changing fast and shrinking. Serious discussion regarding developing and implementing synergistic opportunities among independents is necessary. ‘Not in my backyard’ has no room now in the IDC if we are serious about recapturing lost share.”

Further consolidation Judging by the amount of consolidation that is currently going on in the reseller channel – and the vendor community is likely to follow suit – there will be many more that will fall by the wayside. But while the perception that bigger is better remains, Dave Guernsey, CEO of large independent Guernsey, warns that even larger dealerships not addressing the changes in market dynamics are not immune. He says: “We will see a good deal of consolidation in the IDC, particularly with small-and-medium-sized dealers in urban markets. It’s happening already and will only accelerate. But any dealer without a strong balance sheet – not just the small ones – will be at risk. We have new generations of end users that have very different expectations of resellers.” Many of these expectations were referred to in last month’s Hot Topic (see ‘The rise of the millennials’, OPI May 2015, page 30). Concepts like the need for customer service, convenience and information remain the same, but how these are delivered will continue to alter unimaginably. How will you be reading your 300th issue of OPI – on your smartwatch? Or will that be old technology by then?

5 BIG questions for the OP industry… answered At OPI’s recent Global Forum in Chicago, where a wide variety of the most current industry issues were addressed, Robert Baldrey, CEO of UK-based EVO Group, posed ’10 BIG questions for the industry’ to an audience of senior executives. Under Chatham House Rules, which always apply to OPI Forums, we wouldn’t typically be allowed to publish details of this presentation, but Baldrey waived the rules for the purpose of this special feature. Here, we highlight just five of his questions – and answers – that Baldrey took to the Global Forum to discuss with his peers:

Robert Baldrey

Q: What are we going to do about the industry’s antiquated product cycle which is based around the annual catalogues? A: The industry is still organised around the paper catalogue, which means that product selection is currently going on for the 2016 catalogue. All channel partners are geared up around this annual cycle, yet this means that a product launched in, say, October, might have to wait 14 months to be listed in a catalogue. That’s crazy. We have to accept that the catalogue is just one of the marketing tools at our disposal to reach the end user, and make far better use of the web, where we can list new products within days of launch, not months.

Q: What are you doing about technology? A: Take a look at the new Microsoft Surface Pro 3 tablet. How many traditional products does it replace? It’s a PC, a notebook, a pencil, a document wallet, a filing cabinet, a phone, and a whole lot else besides. What will the next generation of technology products do for the office? Are we embracing this as a selling opportunity or sitting around and watching traditional sales decline as someone else eats our lunch? We need to get serious about selling the products that are going to be increasingly used in the office, otherwise we will look like candle sales people after the light bulb was invented.

Q: How are you going to do what you’ve always done with more competition and lower margins? A: Business models that have worked in the past are going to come under threat as margins tighten. There is still far too much duplication of effort and cost in the supply chain, with dealers, for example, stocking products that are held in the wholesalers’ warehouses. We have to identify our core skills and focus on them, de-duplicating cost in the process if we are to remain competitive. In the UK, there are a number of innovative new operating models that are addressing this and resellers should urgently consider these models as a serious option.

Q: What are you doing about the web and about Amazon Business? A: Amazon Business has now launched in the US offering its excellent service levels and huge product range with the added benefits of customer service agents on the phone, and reporting tools and authorisation controls for procurement managers to use. Above all, it’s offering credit terms. The traditional wholesaler-dealer channel can survive and thrive against this threat, but not if we cling to the traditional methods of working. We have to embrace the new models referred to in Question 3.

Q: What do we do about our antiquated and complicated pricing models? A: This industry excels at creating hugely complicated pricing models throughout the supply chain. A plethora of back-end growth rebates, EDI rebates and marketing funds means that it’s hard, if not impossible, for players throughout the channel to understand what are actually their true ‘dead net’ costs. The internet has brought price transparency to the end user, where you are only a couple of clicks away from the lowest price. How are you going to compete if you don’t know the cost of your product? We must move towards up-front pricing and trust our sales people to not give away all the margin.

w w w.opi.net | OPI Magazine

250th Issue | Special Feature

OPI milestones Going back 250 issues and doing justice to what’s been happening in the OP industry over all those years would be futile, but here’s a snapshot of just a few milestones that OPI has clocked up over the years and over these 250 issues. Many themes are recurring in one way or another. Consolidation, for example, is one that permeates different channels and almost all issues. Others, like technology or even customer service and what it means today, have changed almost beyond recognition. Industry experts – then and now – give their views of the highs, the lows and indeed the core issues they have faced since the first issue of OPI went to press in November 1991.

In the news: Staples still outpacing its rivals… Touchdown for Howard Brown… Office 1 launches web franchise… Depot and Nukote attempt to settle legal dispute Exactly five years ago and in fact our 200th issue, OPI revealed that Howard Brown and his son Michael had returned to the OP industry after an enforced absence due to Office Depot buying their former dealer roll-up Allied. In this issue of OPI, we speak again to Michael Brown, CEO of the then newly-formed HiTouch Business Services (see Big Interview, page 17). But even back in 2010, Brown had the vision to think

beyond OP and see a new picture emerging. He said: “We’ve built up tremendous relationships with facilities managers through Rentacrate and ShredX. This means we’re really able to talk to the many different decision-makers within an organisation, and if I can’t sell them OP, but I can sell janitorial or MPS, I can be in many different arenas with each of my customers and, over time, hopefully, penetrate that customer.”

200th

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In the news: Industry’s first US OP awards… OfficeMax opens concept stores… Interaction’s European expansion… United/SAP team up for solution By now, the US OP big boxes had realised that the writing was on the wall for the warehouse-style design of their superstores. And this month, OfficeMax announced the roll-out of its new retail store model. Too little, too late? Boise Cascade had bought OfficeMax two years prior, but failed to see where retail was going. As

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Mike Gentile, CEO of Independent Stationers (but at the time of the acquisition employed by Boise), says: “I am surprised that the big box retailers did not recognise that retail had reached its life cycle. When Boise acquired [...] OfficeMax, some people were still drinking the ‘Retail is King’ Kool-Aid. Now the reality has set in and I believe the industry will be unrecognisable in five years.”

In the news: Stemberg stepping down as Staples CEO… Saggio acquires Singapore businesses… Arrow goes live… Mead and Westvaco to merge Staples has rarely been out of the news since OPI was founded, but this issue marked another bombshell, albeit not a surprising one. Founder and CEO Tom Stemberg stepped down to make way for operations man Ron Sargent. At the time, Sargent said: “The key part is evolution. There is not a new strategy or vision. We have worked diligently to create a plan for Staples that allows us to individually focus on different areas of the company while operating in tandem to define overall strategic vision.”

100th

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Another well-known industry figure in this issue of OPI was Paul Gatens, then and now with SP Richards. He said: “Mobile commerce via wireless devices will have an impact on the e-commerce industry in general, but how will it impact the OP industry? The only thing we can count on is change. Change at a phenomenal pace dictating that we develop dynamic instead of static business plans.” Turn to page 31 for Sargent’s view on all things Staples/OP.

In the news: Staples/Depot: Off!… USOP joins Nasdaq 100… BPGI names officers… Avery acquires ‘down under’… BOP enters France The biggest story of the month was undoubtedly the failed merger between Staples and Office Depot. The FTC blocked it, saying it would be anti-competitive and lead to higher prices. And while consumers and no doubt the vendor community breathed a collective sigh of relief, dealers continued on their quest to face the big box threat. Recently formed BPGI named its first four officers, with Dave Guernsey, CEO of Guernsey, taking

up the post of Chairman. It’s a time Guernsey now cites as one of the highlights of his career, saying: “In the late 1990s when the power players were coming on strong and the acquisition of independents was at an all-time high, the independent dealer community came together under the banner of BPGI. While that model ran its course here in the US, it was very viable and a sign of what working together could achieve.”

50th

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In the news: United Stationers – clarification of European plans… Kmart commitment to office products… Spicers files report and accounts for “difficult” 1990 The first OPI Big Interview ever, in November 1991, was with Desmond ‘Dez’ La Place, then Vice Chairman of newly-formed ACCO World Corporation. When asked what the future looked like, he said: “It has never been more demanding in terms of trying to protect margins and be aggressive in the market. st customer is more sophisticated today; the dealer, issue The wholesaler, the superstore, are setting their demands for

service and price... We are optimistic, but it is without doubt the most challenging environment we have ever been in.” What would La Place have made of ACCO’s challenges today? Elsewhere in the first issue was an interview with industry legend Eric Bigeard who said: “[Lyreco] will no longer buy from manufacturers who sell direct.” How times have changed... w w w.opi.net | OPI Magazine

250th Issue | Special Feature

Message from *Ron Sargent Ron Sargent, CEO of Staples, is one of the true industry stalwarts who has seen all of the good and the bad, the sad and exciting that’s been going on, with Staples often right at the centre of the action. No look back – or indeed forward – would be complete without talking to him. OPI has the exclusive views from the most influential man in OP… Ron Sargent on the challenges of the office products industry… Most industries would be challenged by one major shift. The office products industry is going through three. The first is products, as customers shift from paper-based products to digital products. The second is a massive channel shift, as customers move from shopping bricks-and-mortar retailers to online and mobile channels. The third is competition. We’ve seen many more competitors enter our space – traditional retailers, club stores and, of course, online retailers. How Staples is addressing them… At Staples, we responded to all these shifts by reinventing our entire company. We’ve expanded our assortment to include more than a million items. Today, nearly half of our sales come from products beyond traditional office supplies. For example, cleaning and breakroom supplies are a $2 billion business for us. We’re also seeing strong growth in services, especially Copy and Print. We’re further reshaping our retail network, expanding our assortment and offering services. Customers love the service our dedicated associates provide, something that online-only retailers just can’t offer. We’re strengthening the connection between our stores and our online business to make it easy for customers to shop however and whenever they want. And of course, we’re continually investing in technology, enhancing our website and building our mobile capabilities. We’ve seen strong online growth as a result of these investments.

The future of Staples… One thing we’ve learned at Staples is that we play a crucial role for our customers. They rely on us for the products and services they need to run their businesses. For us, it’s important to keep customers at the centre of everything we do. That means continuing to respond to shifting customer needs. Online and mobile will continue to grow in importance. At the same time, stores aren’t going away. Customers still like stores. They like to shop, and they love the service associates can provide. In addition, certain services, such as Copy and Print, just can’t be done through an online-only model. As a result of this, a truly omnichannel offering will be crucial to success. I also believe we’ll see the continued expansion of what we offer in areas beyond traditional office supplies. Customers will rely on us for facilities supplies, furniture and technology as well as traditional core supplies, like paper, ink and toner.

“We’re in the middle of a revolution, and all of us get to play a part in the reinvention of our industry”

And the industry as a whole… This is a historic time for our industry and I’m very optimistic about the future. We’re in the middle of a revolution, and all of us get to play a part in the reinvention of our industry. Many of us went through the big-box retail revolution, and now we’re part of the digital revolution. Over the years, Staples has transformed itself many times in response to customer needs and industry trends. That’s one of the highlights of our industry: constant change. It isn’t always easy, but it’s certainly exciting.

w w w.opi.net | OPI Magazine

Dealer Spotlight | UOE

When opportunity ortunity knocks UK dealer UOE has managed to throw off the staid and tired traditional post office image through its modernised retail outlets – with plans afoot for many more franchises

UOE Fact Box Founded: 1983 Headquarters: London, UK Owner/Managing Director: Elliot Jacobs Staff: 30+ First-call wholesaler: VOW Dealer group: Office Friendly Business model: B2B and B2C Geographical coverage: UK

keep any industry alive and thriving, entrepreneurial spirit is essential. In OP, Elliot Jacobs, owner and Managing Director of UK dealer UOE, has it aplenty. At the age of 40, Jacobs is probably considered a ‘youngster’ in the industry, but his OP credentials stretch way back, having worked at UOE as a teenager. After a stint in the IT sector, he decided he wanted to go back into the OP world and bought UOE in 1998. Having transformed the company’s business model to incorporate e-commerce while retaining the original retail store format, UOE now runs successful commercial and retail divisions.

Commercial survival UOE’s B2B segment currently turns over about 70% of the company’s revenues. Indeed, B2B remains at the heart of UOE and, while relatively flat over the past 18 months, is starting to see positive growth due to investments in its team, product category expansion and a focus on gaining new business. Furniture, managed print as well as digital printing are all categories that are seeing sales increases, says Jacobs. “The biggest success we’ve seen in the past 18 months is through broadening our product range and increasing the amount of spend from our existing customers.” Customer retention is something UOE excels at, adds Jacobs, and he puts that down to “good service levels” as well as price

OPI Magazine | June 2015

transparency and competitive pricing. “We work really hard to help our customers reduce their expenditure,” he says. As a VOW dealer, UOE can offer over 18,000 products to its B2B customers, Elliot Jacobs whereas the retail outlets offer around 5,000 SKUs – around half of which are available in-store only. Jacobs explains that logistical issues have prevented some of the retail-only products from being available to B2B customers, but believes there are definitely niches in this market and these include social stationery, for example. “People won’t buy a notepad nowadays as they have an iPad, but they’ll happily buy a Moleskine,” he says.

21st century retail UOE has always had a retail arm and in the past operated two or three stores in London. However, with both shopping on the UK high street and the purchasing of office products changing considerably over recent years, the company has tried different retail models to cope with the altering landscape, with varying degrees of success. Crunch time came around two years ago, when the decision was made to close all but its main store based in the north of the capital. “We were considering our retail

Dealer Spotlight | UOE options, including whether to even stay UOE is to feature in a forthcoming three-part series in the retail game. called The Post Office on BBC2 which will chart Then we read an the modernisation and transformation of the post article in the local office. The series will visit a number of post offices paper about the including UOE’s first store at the dealer’s East government looking Finchley, London, HQ, as well as following the team for franchise partners as it worked on a very tight schedule to launch the for some of its larger second branch. The documentary is scheduled to air post office branches,” mid-2015. explains Jacobs. One of the franchises up for grabs was across the road from UOE’s head office. Jacobs decided to jump in with both feet, competing against the likes of retail giants Tesco and WHSmith. He believed there was a place in the market for a one-stop shop – a concept store that encompasses stationery, business services such as binding, laminating and internet access, plus a full-scale post office. “We also said we would operate seven days a week, with early opening and late closing times, and were awarded the franchise in May 2014.” A year on and UOE retail sales are up – 80-100% depending on the month – and so too is the volume of customers served. “The franchise business is operated on a fee basis, so sales don’t quite have the same value,” Jacobs explains. “But,” he adds, “more interesting is the fact that across the entire business, we should serve one million customers in 2016.” He attributes the retail success to the store environment that is “very fresh, very different and very on-trend”. The concept includes piping dance music throughout the store and staff clothed in jeans and hoodies. “It’s a very different environment and certainly not the staid, grubby, 1970s Stalinesque post offices that the British public are used to,” he notes. The success of the first franchise led UOE to reach an agreement for a second and this was awarded in February of this year. And not one to rest on his laurels, Jacobs is currently working on a proposal for a third franchise just north of London and the biggest one to date. If it gets the nod of approval, the new outlet will comprise a café, stationery store, post office

TV stardom

“...across the entire business, we should serve one million customers in 2016”

OPI Magazine | June 2015

and a business hub on the ground floor. Two other floors will be used as co-working spaces that will be available for hire by the day, month or year. Jacobs has ambitious plans going forward, aiming to roll out up to 12 branches within the next four years, all close to London for ease of staff training and support.

Scaling responsibly So how does UOE deal with an increasingly successful franchise business that runs alongside its core commercial division? It’s important not to spread yourself too thin, warns Jacobs, and to share job responsibilities carefully. Jacobs focuses primarily on the B2C division while UOE’s Group Operations Director Simon Rogers takes charge of the day-to-day running of the B2B segment. Bringing the two divisions closer together is a project UOE is currently working on, starting with unifying the B2B and B2C online portals. In addition, the dealer is investing into both sides of the business, but in a two-pronged approach for growth. Jacobs points out that B2B and B2C operations are totally independent in terms of their ability to scale. And, as a fast-growing business – UOE expects to grow to over 40 staff by the end of the year and to around 100 within the next two years – having a complete handle on the business is vital to its scalability. This is where UOE’s analytics capabilities come in. The company has built its own data analytics system, which helps identify where the growth opportunities are in existing and new areas, including retail. As Jacobs explains, understanding what customers buy, and where and how they buy it is vital to UOE’s growth. He adds: “We’re very data driven, whether its real-time analytics on the digital wall board in the office, or being able to access the retail figures across the branches in real time on my mobile phone. Data and technology are the drivers that enable us to get the job done.”

State of the Industry Report | Research

Bucking the trend Despite widespread decreases in the value of several global ‘core’ OP markets, overall revenues are actually on the up thanks to new and buoyant categories like FM and technology. This is just one of the findings of The State of the OP Industry 2014-15, OPI and MWA’s latest market research study

year ago, 36% of senior OP industry executives expected the core OP market value to increase in 2014, while as many as 50% expected the market to decrease last year, with most of them believing the decline would be less than 6%. These were the results of the first annual industry survey conducted by OPI and specialist OP market researchers Martin Wilde Associates (MWA), based on perceptions of and forecasts for the OP industry among senior industry executives worldwide. Now, with the second edition of The State of the OP Industry 2014-15 just published,

core OP market performance turned out to be slightly worse than even these gloomy expectations. As Fig 1 shows, the value of the core OP market was believed by nearly 60% of respondents to have declined by about 3-5% in key national markets in 2014, while only about 9% felt that market value had increased during the year.

New category growth

Fig 1: Change in core OP market value 2014-2015 59.6%

17.5% 8.8%

8.8% 3.5%

by ased Incre 1-2%

d ange Unch

1.8%

d by d by d by d by ease ease ease ease Decr % Decr Decr Decr 5 % 11-1 3-5% 1-2% 6-10

Source: MWA

However, the research also found that virtually all respondents believed that they had bucked this downward trend in 2014. Overall, respondents reported that their sales had outperformed the core OP market in 2014, with the majority claiming that sales had in fact increased in 2014, with the largest share (21%) posting growth rates of 1-2% and over 10% stating that they had achieved revenue increases of more than 10%. Once again, the product category that was by far the most widely reported as growing in 2014 was facilities management (FM) supplies (89% of all respondents), with a significant share also mentioning growth in IT categories (tablets/iPads and smartphones) as well as in a resurgent office furniture sector. However, virtually none of the traditional paper-based OP categories were reported as seeing noteworthy growth in 2014. Indeed, it was these categories that were most widely reported as being in decline in 2014, particularly envelopes, filing supplies and cut office paper. Overall, the two distribution channels that were by far the most widely reported to have won market share in 2014 were – once again – Amazon/eBay followed by the internet-only OP resellers. w w w.opi.net | OPI Magazine

Research | State of the Industry Report Fig 2: Distributor respondents by channel

3% 3%

35%

15%

■ ■ ■ ■ ■ ■ ■ ■ ■

Other key trends identified for 2014 by research respondents – which include a combination of distributors and manufacturers (see also Fig 2 and Fig 3) – are as follows: • Nearly half of the distributor respondents reported that their average gross margins had declined in 2014, while only 23% claimed that theirs had increased. • 33% of resellers reported that their net profits had increased in 2014, while a slightly smaller share (30%) claimed that they had experienced a decrease in net profits. • There has been a steadily increasing share of own label products, although this varies by country. Overall, the share of own label among distributor respondents was 19.1% on average in 2014; among manufacturers, it was 16.5% on average.

OP dealer group Multichannel OP distributor National contract stationer OP dealer/reseller OP mail order business OP wholesaler OP (B2B) superstore Computer supplies/IT distributor Other

18%

Source: MWA That said, it is clear that there has not been a universal flight away from bricks-and-mortar channels, since the mass market retailers were also reported to have grown significantly in many countries. Of the traditional OP channels, it appears that it was – perhaps surprisingly – the independent OP dealers that were most widely regarded as having taken share in 2014. Conversely, it was the traditional OP channels which were most likely to be regarded as having lost share in 2014, particularly the OP superstores, contract stationers and mail order businesses, as well as – albeit to a slightly lesser extent – paper merchants and OP wholesalers.

Fig 3: Manufacturer respondents by sector 5% 9% 14%

14%

The markets investigated in The State of the OP Industry 2014-2015 include seven countries: the US, Canada, Benelux, France, Germany, the UK and Australia. And by and large, the research established that similar downward trends were evident in all of these markets, for a number of different reasons: • Digitisation • Mobile/flexible working • Commoditisation of core products • Growth in share of private label and unbranded products • Lack of innovation • Economic recession • Reduced employment • Cost-reduction exercises by private and public sector • Price competition • Currency fluctuations • Price deflation OPI Magazine | June 2015

23%

Global phenomena

14%

■ ■ ■ ■ ■ ■ ■ ■ ■

Writing instruments Filing supplies Computer/IT consumables and accessories Office and desk accessories Presentation and planning supplies FM supplies Envelopes Books and pads Shreddders, binders and laminators

Source: MWA

Want to know more? This extensive 327-page research study is based mainly on insights and data collected from 57 senior OP industry executives from major OP companies in the US, Canada, Benelux, France, Germany, the UK and Australia. The report includes the 2014 financial performances of 15 key OP distributors in the US, Europe and Australia, as well as an analysis of the main industry events during the year. Importantly, it also features the predictions for the OP industry in 2015 of these 57 key CEOs, including comments on: • • • • •

Core OP market size and growth Estimated sales growth and profitability Growing/declining product sectors Growing/declining channels Future trends for other key issues, including own label share, the share of online sales, MPS penetration and the share of sales in FM supplies

The State of the OP Industry 2014-15 offers a reliable and objective yardstick for senior OP executives against which they can assess their own performances, perceptions and strategies. This must-have, authoritative annual sourcebook for the OP industry is available now for only US$1,200 (£750). To order your copy, go to www.opi.net/SOTI2015

EOPA 2015 | Event Review

the fire SP Richards returns to Las Vegas for this year’s ABC extravaganza

SP RICHARDS’

(SPR) Advantage Business Conference (ABC) first came to Las Vegas in 2000 and the theme of the event was ‘Professionalism: Knowledge of Fire’. This year, for its 17th ABC, the US wholesaler returns to the gambling capital and the second largest hotel resort complex in the world, the phenomenal MGM Grand. And the theme – IGNITE – is not completely different this year, further stoking the fire that started as a slow burner all those years ago.

Facing the future Never was there more need to do that, given what’s happened in the OP industry since last year when SPR’s SVP of Marketing Jim O’Brien urged delegates to embrace change – urgently. Back then, O’Brien was talking about the integration process at Office Depot and OfficeMax. Now we’re talking about whether the mother of all mergers – Staples and Depot – is going to go ahead and if so, what that will mean. There’s no doubt that the scope of the OP – or business supplies – industry is becoming ever-wider and more encompassing, having to face up, like never before, to threats like Amazon Business or Google algorithm updates (see also page 12 and page 66, respectively).

But at the heart of dealers’ businesses are still the same core issues: how to hire the best sales staff; how to maintain close relationships with customers; how to enhance brand identity; how to keep workable margins. These – and many more – will be addressed during the extensive seminar and workshop line-up that SPR has organised. On a more general note, two high-profile keynote speakers – Jeremy Gutsche and Simon Sinek – are expected to give powerful performances that will provide plenty of inspiration and vision on how to go about igniting that fire and affecting change while remaining relevant and successful along the way.

Once again, the OPI team will be present at this year’s ABC, to present the NAOPA (for more information, see page 44), provide a daily update on what’s happening at the event and, importantly, learn about what makes the business supplies sector tick in these changing times. As O’Brien says: “SP Richards’ ABC will strike the match and light the fire of professionalism this June in Las Vegas, so ‘Ignite Your Passion to Succeed in 2015’!”

What’s on at ABC 2015?

22 June

Inspiring and thought-provoking keynotes, informative and educational seminar sessions and workshops, innovative product displays and, of course, plenty of networking opportunities – here’s what’s in store at ABC 2015: í í í í

Keynote speakers – Jeremy Gutsche (22 June) & Simon Sinek (24 June) Dealer seminars and workshops – 22 & 23 June Business Solutions Expo & prize drawings – 24 June North American Office Products Awards (see also page ?) – 24 June

24 June

Also look out for SP Richards’ Town Hall Meeting (22 June) and an OPWIL-sponsored talk about the ‘Three Truths Female Leaders Need to Know’ by Colette Carlson (23 June).

w w w.opi.net | OPI Magazine

24 June

Preview | NAOPA 2015

Cream of the crop IT’S

nearly time again for the North American Office Products Awards (NAOPA), the most recognised awards in the North American OP industry hosted jointly by SP Richards (SPR) and OPI. Launched in 2010 and now in their 6th year, the NAOPA seek to find, acknowledge and reward the best products and the leading players in the industry. As every year, the awards will be presented during SPR’s annual Advantage Business Conference (ABC) which takes place at the fantastic MGM Grand in Las Vegas from 21-25 June (for a preview of the ABC, see page 43). The NAOPA are split into two categories – vendor and dealer awards. The former includes entries for the best product in the following sectors:

OPI Magazine | June 2015

• • • •

Finding and rewarding the best dealers and vendors in North America – that’s what the NAOPA are all about

Cleaning and Breakroom Core Office Products Technology Furniture In addition, there’s the overall Product Innovation of the Year and the People’s Choice award. OPI has once again been overwhelmed by the high quality of the entries – and the judges certainly had a tough time deciding on the winners. That said, the strength of the entries, especially in growth categories such as cleaning and breakroom, can only be good for the independent dealer channel. The final vendor trophy is the People’s Choice award that – first launched in 2012

NAOPA 2015 | Preview

Who’s going to win this year’s People’s Choice award? It’s up to you, ie all North American OPI readers and attendees of SP Richards’ annual ABC event. All shortlisted products, as described on pages 47-49 (and in more detail on www.opi.net/naopa2015), are eligible for this award. The vote is open now – please text the unique code of the product you would like to win to 22333 (from a US phone). The final votes will be cast during the ABC and the winner announced at the Gala Dinner on 24 June when the Professional of the Year and Industry Achievement awards will also be presented. Last year’s winners: Deflecto - Lit Loc Interlocking Literature Displays

There’s no doubt that the two individual awards – one for Professional of the Year and one for Industry Achievement – are a highlight, not only of the NAOPA, but also, traditionally, of the last night of SPR’s ABC event. OPI has seen some tremendous nominations for these categories over the years, with some very worthy winners taking home the trophy. Among them is last year’s winner Bud Mundt (see left) who received the Industry Achievement award from his son Bud Mundt Jr in an emotional and touching handover. OPI Director Janet Bell says: “It is a real honour to reward the leading dealers in our industry. We are always looking for those individuals who really make a difference to their organisations and the industry as a whole. You can tell by the reaction in the room that these people have had a real impact on the dealer community.” As Mundt said: “The OP industry has changed tremendously over the years, but its values, from where I am standing, have not.”

? ?Choice

Dealer awards

People’s

– has become an integral and very popular part of the NAOPA (for more on the People’s Choice, see box, right, and our shortlist on pages 47-49).

w w w.opi.net | OPI Magazine

NAOPA 2015 | Preview

NAOPA Shortlist Best Product – Core Office Products 3M Clor Group HSM ShurTech Brands Victor Technology

Post-it Dry Erase Surface Justick Triple Function Dry-Erase Whiteboard SECURIO AF500 Autofeed Document Shredder GeckoTech Reusable Hooks High Rise Dual Monitor Sit-Stand Desk Converter

Best Product – Cleaning and Breakroom Hisense USA Impact Products Newell Rubbermaid P&G Professional Sofidel America

Hisense Chill Barricade Odor Defense System Executive Quick Cart Bounty with Dawn Heavenly Soft Dissolvetech

Best Product – Furniture Ghent Mayline MooreCo Safco Victor Technology

LINK Board, Powder Coated Whiteboard Keep Modular Wall System Cloud 9 Collaboration Tables Vamp LED Lighting High Rise Dual Monitor Sit-Stand Desk Converter

Best Product – Technology Fellowes Imation Logitech Paris Corporation

AutoMax 200C Auto Feed Shredder LINK Power Drive Keys-to-Go Ultra-Portable Keyboard for iPad Weego Jump Starter Battery+

Product Innovation of the Year Bi-silque/ MasterVision Ghent Hisense USA ITW Pro Brands Victor Technology

MasterVision 360° Gold Ultra Magnetic Dry Erase Multi-Use Mobile Easel LINK Board, Powder Coated Whiteboard Hisense Chill Sertun Rechargeable Sanitizer Indicator Towels High Rise Dual Monitor Sit-Stand Desk Converter

w w w.opi.net | OPI Magazine

Preview | NAOPA 2015

Who will you choose?

There’s still time to become involved and influence the winner of this year’s People’s Choice award. Here are the all-important numbers...

170219

170280

3M Post-it Dry Erase Surface

Bi-silque/MasterVision MasterVision 360° Gold Ultra Magnetic Dry Erase Multi-Use Mobile Easel

OPI Magazine | June 2015

170748 Clor Group Justick Triple Function Dry-Erase Whiteboard

170792 Fellowes AutoMax 200C Auto Feed Shredder

171017 Ghent LINK Board – Powder Coated Whiteboards

171068 Hisense USA Hisense Chill

NAOPA 2015 | Preview

171128 HSM SECURIO AF500 Autofeed Document Shredder

171244 MooreCo Cloud 9 Collaboration Tables

171372 Sofidel America Heavenly Soft Dissolvetech

171163 Imation LINK Power Drive

171280 Newell Rubbermaid Executive Quick Cart

171412 Victor Technology High Rise Dual Monitor Sit-Stand Desk Converter

171164 Impact Products Barricade Odor Defense System

171289 P&G Professional Bounty with Dawn

171215 ITW Pro Brands Sertun Rechargeable Sanitizer Indicator Towels

171291 Paris Corporation Weego Jump Starter Battery+

171216

171219

Logitech Keys-to-Go Ultra-Portable Keyboard for iPad

Mayline Keep Modular Wall System

171296

171354

Safco Vamp LED Lighting

ShurTech Brands GeckoTech Reusable Hooks

Make your vote count and text the unique code to 22333 For more information on the shortlisted products, please go to www.opi.net/naopa2015

Event Review | OPI Global Forum 2015

Grasping the nettle Change must happen quickly if our industry is to survive and thrive

one delegate pointed out, with all that is happening in our industry at the moment – consolidation, bankruptcies, declining margins, secular declines in traditional categories, changing working habits, Amazon Business, etc – it was a good time to have a conference which tackled a lot of these issues head on. As such, there was a real sense of purpose and engagement amongst the participants at the 2015 OPI Global Forum that took place in Chicago in mid-May. The Forum

things don’t change soon, then the very future of our industry is in peril. You can get a better idea on page 27 of some of the areas where change is most urgently required in an extract from the presentation given by EVO Group CEO Robert Baldrey. One of the themes he mentioned and that cropped up more often than all the others, was Amazon and the threat it poses to the reseller and – potentially – the wholesaling communities. One thing that was generally agreed upon was that resellers

There certainly appeared to be the realisation that if things don’t change soon, then the very future of our industry is in peril brought together around 100 senior executives from North America, Europe and Australia in what was a unique mix in terms of geographical and channel representation. It included delegates from global resellers, dealers and dealer groups, wholesalers, vendors and industry associations – and not only from a traditional OP background, but also from important growing sectors such as jan/san and breakroom.

A watershed moment Over two stimulating and thought-provoking days, perhaps the main takeaway was the urgent need to embrace and drive change in what was described as “a watershed moment” in the history of our industry. Of course, that’s easier said than done, but there certainly appeared to be the realisation that if

OPI Magazine | June 2015

shouldn’t be taking on Amazon on price alone. It’s a strategy doomed to fail and those that try will face the same fate that befell those grocers which tried to take on Walmart on price in the past. However, there are opportunities for those able to create a point of differentiation, a unique selling proposition or offer services that Amazon doesn’t or can’t. It could be about customer relationships

and flexibility, about omnichannel capabilities or about service levels such as desktop delivery.

Aiken steps in The 2015 OPI Global Forum was also the first chance for many delegates to meet new United Stationers – known as Essendant by the time you read this – CEO Bob Aiken. Aiken took over as interim President/CEO of Essendant just two weeks before the Forum took place following the sudden departure of Cody Phipps (see News Round-up, page 6), and he kindly stepped into Phipps’ shoes for the Big Interview at the end of the first day. Aiken was interviewed by OPI CEO Steve Hilleard and responded in a confident and articulate manner on a variety of topics, including Essendant’s future strategy, the threat of Amazon and industry consolidation. He clearly has a deep understanding of Essendant’s business from his time on the wholesaler’s board of directors, and his time in the foodservice industry – he is a former CEO of US Foodservice – also appears to be an asset. Time will tell if Aiken gets the job on a full-time basis, but he seems a strong candidate. One statement that came out of a presentation on private brands was that you need to be either an innovator or a fast follower. If you’re neither of these you will get left behind and become irrelevant. This idea would appear to hold true today not just for private label, but for the industry as a whole – interesting times indeed.

Sponsored Article | HP

The move to

Qualified Supplies 2.0 HP’s Steve Sakumoto explains the next phase of HP’s Qualified Supplies Partner program

SINCE

2013, HP has been striving to improve its customer purchase experience, moving from an open to an Authorized and then to a Qualified program for the resale of its original supplies in the US. November 1, 2015 sees the next phase of the Qualified program, with resellers needing to fulfill a few new requirements, particularly in relation to how they sell HP supplies online. OPI caught up with Steve Sakumoto, HP’s VP and General Manager, US Supplies Sales Organization, for more details.

the primary criteria that eliminated most of those resellers. If you look at it from an overall perspective, I would say 99% of our business is from our top 1,000 or so resellers. So you can see we had a tremendously long tail with very little volume, and from a business impact the change was almost indiscernible.

OPI: What is the rationale behind the next stage of the Qualified program? SS: When we first started this journey back in 2013, the fundamental strategy was to be able to deliver the best customer experience for purchasing OPI: How did the move from HP supplies. Part of the customer Authorized to Qualified go? You experience is how the HP brand reduced the number of resellers is presented, sold and ultimately quite significantly, didn’t you? transacted to the end user. Steve Sakumoto: The final number Those fundamentals have not ended up at between 4,800-4,900, changed – the driving strategic intent which was exactly to plan, and the behind all of these changes is how whole process went very smoothly. to continue to improve the customer We did have a few purchasing one-off complaints, experience so that which would be they are happy expected when buying HP supplies you’re cutting and they come out roughly back again as a 3,000 resellers, but by loyal customer. From November 1, all HP supplies resellers in the US will be required to display the Qualiﬁed and large it was a very One of the successful transition – we Supplies medallion on their websites. things we’ve had robust processes to manage the found is that as customers turn applications and people trained to increasingly to the online channel to handle that, and I think it paid off. buy products, we have also had to Both the distribution partners as well shift our investment and our focus to as the second tier resellers all said make sure that this channel is as well that they thought it was a worthwhile presented, well maintained and well thing to do from HP’s perspective. supported as our bricks-and-mortar and our commercial B2B sales forces OPI: Almost 40% of Authorized have been. resellers failed to gain Qualified And as we shift our attention online, status. What were the main we also want our resellers and our reasons for that? distribution partners to follow us SS: The minimum sales threshold of there and make that same shift in their $15,000 over a six-month period was sales motions and capabilities. So

OPI Magazine | June 2015

Only Qualiﬁed Supplies partners can purchase Original HP Toner cartridges with JetIntelligence.

that’s the reason why, when we looked at our Qualified 2.0 program – which we announced on May 18 for effective implementation on November 1, 2015 – we have focused most of our tweaks, so to speak, on improvements in the online marketing and sales space. OPI: What are those ‘tweaks’? SS: If you look at the Qualified program we introduced last year for implementation on November 1 2014, we really focused on the online presentation of the product itself: the naming of the product, the image associated with that product, etc, because what we found in our research was that customers were primarily confused and they were struggling to understand exactly what they were buying. What we’re doing this coming November is following that up with additional improvements in the whole area of online purchasing. We’ve done a lot of customer research

HP | Sponsored Article this past year and we’ve found that when our customers go to buy a product online, they are presented with confusing or irrelevant product search results and advertising. We know that most people shop online for a specific product; they want to have a focused approach

Specifically, we’re adding two things that are related to online search. The first is that when a customer searches for Original HP ink and toner, the website must return HP search results first because that’s what the customer is looking for, not alternative products. I’m not saying alternatives

“Resellers […] will generate better goodwill with the customer that hopefully leads to a return purchase and loyalty” to identifying the product, finding the right selection and then getting checked out quickly. Instead, what we find in a lot of web searches is that customers are bombarded with options, many of them not related to the product they are looking for. It’s a confusing and customer-unfriendly shopping experience. To address that, we have added new criteria into the qualification experience that we believe will enable resellers to better manage that customer shopping experience and to create a more focused and simplified approach. This will ensure that when the customers go into their online shopping space, they can easily navigate, find the products they want and check out in a very quick and simple manner. Steve Sakumoto HP VP and General Manager, US Supplies Sales Organization

cannot be presented at all, it’s just that the HP products must come up first. The second piece involves search-related advertising. Typically, when you search for an HP product on a website, you are presented with a page listing a number of different products and on the top or side banners of that results page there is a series of advertisements. We are requiring that these advertisements cannot be products that compete with HP because we consider that to be brand switching which is leveraging off the HP brand and confusing the customer. We believe these two new requirements are beneficial not only to the customers – who will benefit from a superior purchase

experience – but also to the resellers as they will generate better goodwill with the customer that hopefully leads to a return purchase and loyalty. OPI: I imagine you’re going to be relying on some intervention here from various technology providers to enable your resellers to implement what you’re looking for. SS: Absolutely. Many resellers rely on third parties that specialize in web technology or on our Tier One distribution partners that provide it as part of their value-added services. We’re working with all of them to ensure that they understand what the specific search criteria are, what the appropriate way to present the HP search results is and, most importantly, we’re providing public content for free. The third-party providers can then repackage that content and put it in the appropriate technology funnels for each of the resellers they work with. OPI: What about the other five criteria that you introduced last year? Have you made any changes? SS: The criteria themselves haven’t changed, but there are a few small changes within them. For example, the six-month $15,000 minimum spend for supplies or $50,000 for all HP products will only be valid for HP Inc. once HP is split in two. Another minor change is that we are requiring the resellers display their HP Qualified medallion on their websites. OPI: So that’s a requirement now? SS: Yes, we want every reseller to proudly display that because they are Qualified and it sets them apart from those that aren’t. It’s a watermarked and serialized medallion to deter fraudulent or inappropriate use. We know there are non-Qualified resellers out there that obtain HP products which are not intended for resale through gray market or others means. The HP Qualified Supplies medallion helps those that have met the qualifications to proudly display that and be able to stand by the HP original products they sell. w w w.opi.net | OPI Magazine

Category Analysis | Visual Communications

Visual appeal THE

visual communications (viscom) category continues to go from strength to strength. Sales of interactive display products, panels and boards are strong, companies are reporting stellar growth figures in this sector and they remain enthusiastic about future prospects (see blue quotes).

Sales of visual communications products continue to impress as technology advances and workplace dynamics shift natives, they also love picking up a marker pen and explaining a concept the low-tech way. Our research confirms they are a very visual

“It’s a great time to be in the visual communications space. 2014 was a banner year for Ghent’s whiteboard sales and we anticipate that growth will continue well into 2015, driven by pent-up demand, particularly in the education space.” Janet Collins, President, GMi Companies Further technological advances are expected to drive markets forward, as the corporate and educational sectors gear up with increasingly sophisticated products.

Forward vision Feedback from the main protagonists in the viscom sector shows some common themes underpinning the impressive figures. The growth of millennials in the workplace is one driving force. Janet Collins, President of GMi Companies, explains: “While millennials are digital

OPI Magazine | June 2015

generation that talk by drawing and need space to illustrate their ideas. Consequently, the whiteboard will continue to play a key role as more young people enter the workforce.” Beth Wright, Chief Commercial Officer at Bi-silque, picks up on the same theme and says that this millennial effect is impacting the market globally. Bi-silque is currently completing a market research project on how this will affect the ‘office of the future’, focusing on the homeworking and mobile worker trends and what they mean for viscom products.

Changes in the education sector are also a powerful factor, with the use of interactive boards, tablets and projectors continuing to facilitate collaboration in the classroom. Wi-fi technology is widely used in Finnish schools, for example, says Risto Wolin, Sales Director of Audiovisual Projects at Lyreco in Finland, with the use of tablets and wireless projectors and displays firmly established. He also notes the rise of digital signage which offers a great opportunity to provide suitable screens to customers. But there’s still a need to simplify educational viscom products and also combine them with traditional uses, says Wright: “Our interactive board, for example, can be used as a projection screen, an interactive plug-and-play board or simply as an enamel dry-erase board, giving educators the best of both worlds.” She adds: “The education sector was forced to evolve rapidly,

Category Analysis | Visual Communications Visual Communications | Category Analysis driven by the need to follow the technological revolution. It would be counterproductive to ignore the presence of hi-tech equipment in the lives of students and the opportunities it brings for educators to teach in a more interesting, complete and effective way. This makes even more sense when you consider the kind of skills that these professionals of the future need to acquire.” Wright stresses that while schools prepare students for the challenges of a changing global society, suppliers of educational products must try to design products that help teachers and students make the most of these new ways of teaching. And it’s not just the classroom where viscom products are being used, with increasing uptake seen

massive potential, but progress is slow due to the sovereignty of the individual German states. However, there’s a massive push from students, parents and a new generation of teachers, so even though digital

“We have very aggressive targets for the next 2-5 years in all the major markets where we operate. We’ve expanded our MasterVision salesforce as it’s critical to us gaining market share. We’re actively looking for acquisitions in Europe and North America, and want to further our expansion into South America.” Beth Wright, Chief Commercial Officer, Bi-silque evolution is lagging, it will eventually be a very lucrative business. Resellers need staying power to reap those benefits when they finally come.” Wright echoes the austerity theme: “Education budgets have been slashed, so we find that within

“For the past ten years we’ve achieved annual growth figures of 30-40% and we expect the same for 2015. We’re active in 30+ countries, with the UK, Northern Europe and Scandinavia the best-performing regions, although we also see regions like Spain, Portugal, Italy and Eastern Europe growing rapidly.” Bob Hanemaaijer, Sales & Marketing Director, NewStar in school cafeterias, hallways and music rooms, too. In that context, companies must be prepared to offer the necessary training, so customers can take advantage of these products, wherever they are situated.

Austerity bites Despite the positive outlook, there are still significant headwinds in the education sector, caused by the tight purse-strings of centralised government agencies, the reduction in education budgets or simply reticence in adopting new ways of teaching. Gábor Pataki, Marketing Director of Hungarian wholesaler Corwell, says that in Hungary the sale of interactive whiteboards into schools is at the mercy of state education policies and the vagaries of EU funding: “Centralised and tightly-controlled budgets coupled with a lack of resources mean that Hungary is behind the rest of Europe in the adoption of hi-tech school equipment, and even within the corporate sector businesses are behind the trend.” Things are also moving slower in Germany, according to Arno Alberty, SVP SMB Europe at Medium: “There’s

OPI Magazine | June 2015

that’s dictating the uptake and design of viscom technology. GMi’s Collins reports that while there is much debate over the benefits of the open office concept, collaboration spaces are still in high

schools and colleges it is the mobile products that are the fastest-growing category as items need to be multi-use and moveable around a building.” New opportunities in alternative markets continue to arise, however, including the healthcare sector where the need for antimicrobial boards and accessories is now driving growth. Within the office environment, it’s the changing dynamic of working patterns and the impact this is having on the layout of the corporate space

demand and growing: “More office space is dedicated to comfortable chairs and conversation areas, all of which need flexible collaboration tools such as unique wall options, table tops, mobile whiteboards and space dividers that also have whiteboard functionality.” Sven Reimann, International Business Development Manager at German display-board manufacturer Sigel, says that you can clearly see changes in office design and layout as businesses are replanned and refurbished: “The contemporary, clean and clear design of the modern workplace means there is a huge demand for products which can complement these design standards. Sigel is driving product developments that incorporate today’s style, while anticipating future design trends.” Its Managing Director Oliver Windbrake adds that Sigel’s projection boards are a good example of a multi-purpose viscom product that suits the modern office

w w w.opi.net | OPI Magazine

Category Analysis | Visual Communications environment. These glass boards are magnetic, can be written on like a conventional board, but also have a special surface so that films and presentations can be projected onto the board, with good image quality and high contrast levels.

Clear view Glass is a material that several people OPI spoke to mention as increasingly popular within offices. Collins explains: “We are seeing a general rise in demand for alternative materials that work well for dry-erase purposes. No longer is porcelain the

flexible whiteboard panels where the consumer can put together as many as they need to create the space they require. They are lightweight, frameless and easy to hang. We also produce single whiteboards up to five metres in length that are virtually indestructible for a high-use environment where durability is key.” There are some other significant technological trends that are now beginning to take hold. Luke Jennings, Technology Product Manager at UK wholesaler VOW, notes that video conferencing is increasing in functionality and popularity. He says:

“We’ve seen a strong 25% increase in 2014 sales. The kind of growth we can achieve with viscom is far ahead of that possible with traditional office supplies”. Gábor Pataki, Marketing Director, Corwell, Hungary. only high-end whiteboard solution. “Glass is the fastest-growing new surface for [the] Ghent [brand], including clear, frosted, coloured and steel-backed glass boards that can hold a magnet. In addition, dry-erase paint or powder-coated metal enable interesting shapes, colours and functional design. Other new surfaces gaining attention use the next generation of plastics – Acrylite, for example, looks just as beautiful as glass, but is half the weight and has twice the scratch-resistance.” Kris Dixon, VP of Business Development at Balt MooreCo, agrees: “Glass is a stylish solution for a wall in a contemporary environment, offering a less traditional look. The viscom market continues to grow with new products such as glass boards, full-collaboration whiteboard walls and projection whiteboards. Full-wall whiteboards are ideal for bacterial resistance, multi-person collaboration and durability. There is untapped potential to expand the uptake of these product in the business, education and creative sectors.” “But,” she adds: “We also see the use of interactive projectors replacing interactive boards since their cost is lower. This is beneficial for both the education and commercial spaces.” Bi-silque’s Wright has also noticed a resurgence of ‘whiteboarding’ in the corporate space: “We have responded to this trend by producing

OPI Magazine | June 2015

“People are now able to simultaneously collaborate on a single online document from around the world. The hardware required can include items such as interactive touchscreens, webcams, speakers, professional styluses and even graphics tablets. The market adoption of Microsoft Lync also means that people are investing in their video conferencing structures to ensure they are connected across multiple sites, while future-proofing their business.” Bob Hanemaaijer, Sales & Marketing Director at Dutch viscom mounting specialist NewStar, agrees: “In the viscom field video conferencing is

ergonomic desk mounts which can hold tablets in the most suitable position. Monitor screens are also getting bigger, lighter and cheaper.” Larger interactive screens will indeed have a major role to play in the future, adds Jennings: “There’s a big market developing for large-format displays (LFDs) with interactive screens. Effectively, these giant touchscreen TVs allow simultaneous collaboration on work from multiple locations. However, they’re not cheap and although the demand is there and the products exist, the price is currently limiting uptake. But as the market matures and prices come down, we will see much larger adoption of these products.” Alberty agrees this will take time: “The floodgates for LFDs have begun to open. They’re becoming more attractively priced and penetrating classrooms and conference rooms. LFDs with touchscreen technology

“Sales are increasing every year. The potential is huge and viscom now represents circa 15% of our turnover. We’re now investing in a ‘total care’ package whereby we handle all the planning, installation and maintenance of the products we sell.” Risto Wolin, Sales Director, Audiovisual, Lyreco Finland still a growing category. Technological advances mean performance is much improved and prices are falling. Companies value the investment as they save both time and travel expenses and NewStar sells a lot of the wall mounts and mobile trolleys for the flat-screen displays required. Additionally, the use of dual-monitors in the workspace is growing rapidly, helping sales of dual monitor desk mounts and stands we sell. “The increased use of tablets at work also means we’re seeing strong sales of

are the next breakthrough product, though Germany is somewhat behind here. What’s becoming standard state-of-the-art in the UK, for example, is not very evident in Germany yet. We’ve a lot of catching up to do.” The future for the viscom sector continues to look excellent, with further exciting technological developments poised to burst upon the corporate and educational scenes. Some regions may be a bit slower in the uptake and implementation, but catch-up is inevitable.

Category Analysis | Traditional OP

Tradition in transition Traditional office product sales may be down overall, but it’s not all doom and gloom, with some parts of the sector still quite optimistic

by David Holes

MANUFACTURERS “Feedback from our biggest customers suggests the traditional category is at best flatlining”

and resellers of traditional OP have been having a tough time, with some reporting significant falls in sales of 5-8% year on year. And it’s not just a recent blip; business in this category has been challenging for some time. Rapesco Managing Director Adrian Frost spells it out: “Feedback from our biggest customers suggests the traditional category is at best flatlining. Overall, across all product categories, traditional products are in decline and the industry forecasts that this will continue.” Ada Ma, Brand Manager at Japan-based Carl, explains some of the issues: “As a manufacturer of products such as pencil sharpeners, paper punches and trimmers, we continue to face many challenges. We had a very tough time in 2008-2009 when rival industrial output picked up in China and the financial crisis hit here. The fast growth of digital products also means demand for paper-related stationery is decreasing, so we have to gain market share from a pie that is getting ever smaller.”

OPI Magazine | June 2015

But there’s still light at the end of the tunnel, she adds: “Our sales have actually been growing recently – especially for pencil sharpeners and heavy-duty punches – and we believe the overall decline has slowed and become stable. We’ve also found new markets in emerging countries such as India, Indonesia and the Middle East.”

Stamping ground The marking and stamping sub-sector also seems to be doing well, bucking the trend of the overall category. Andrea Dörner, Assistant Product Manager at Trodat, reports that sales picked up in the first quarter of this year, with Trodat now expecting an impressive overall increase of 15% for 2015. She explains: “This will come partly from economic recovery in some core markets, but also from specific marketing programmes and geographical expansion. Investments in new markets are really bearing significant fruit for us.” Rival Austrian stamp specialist COLOP is also feeling the benefits of economic recovery. Marketing and Event Manager Sabine Mittermair says the company is doing very well under the circumstances: “In key markets such as the UK, Germany and France, COLOP has significantly increased sales despite the difficult conditions. Similarly, the Asian market gives COLOP much cause for celebration, the Central and South American market is doing very well, and we’ve made excellent progress in the US where there’s still plenty of potential.” However, she warns that the conflicts in Ukraine and Syria, coupled with the weakening

Category Analysis | Traditional OP of the Russian rouble and the Ukrainian hryvnia, are affecting sales and impeding growth in some traditionally strong markets.

Commodity and brand Rapesco’s Frost is keen to distinguish between the commodity and brand elements of the market. “In the commodity sector, there’s still a high volume of product being sold because the consumer has traded down as pricing, particularly online, has fallen. "But brands like Rapesco are all about design, features and innovation, and it’s here where we’ve seen market share gains and solid growth. We focus on offering a good, better and best range, rather than getting sucked into investing time and effort in commodity products.”

Stationery makes a statement The 2015 London Stationery Show was the biggest event so far in its five-year history, with exhibitor numbers rising from 116 to 134. This, in turn, attracted over 20% more visitors than last year from as far afield as China and New Zealand. Many exhibitors that OPI spoke to during the show remarked on how good it was to see many of the UK dealer groups in attendance. They were also keen to point out that stationery sales were indeed on the up, against a general trend of declines in traditional OP. Many attributed this to the rising trend of personalised and fashionable stationery. An interesting presentation named 'Stationery in a Digital Age’ by Paperchase Stationery Buyer Pamela Cartwright backed up the trend. She said that stationery was a growing category and has now transformed into a fashion accessory. Sub-categories such as social stationery – menu planners, wine journals, shopping list pads, etc – are also new emerging segments that complement today’s digital lifestyles. Paperchase’s CFO David Bateman added that the company is thriving with record sales. Having opened 15 stores in the UK in 2014, he said Paperchase is expecting to open a similar number this year. In the overseas market, its long-term plans include more stores in Europe, with concessions the most likely route. The show’s Director Chris Leonard-Morgan was evidently pleased with the overall exhibition and said the amount of new products on offer was “inspiring”. Using this inspiration, next year’s exhibition – to be held from 26-29 April 2016 in London during National Stationery Week – will see a new, dedicated area for gift packaging as well as a new logo.

OPI Magazine | June 2015

On that point, Ma adds: “The China-made private label products we compete with are aimed at those consumers who don’t care about product quality, durability or how the production process affects our environment. However, our customers realise the difference between branded and private label products once they’ve tried them and recognise that the Carl brand is an important symbol of quality.”

Style and substance It seems that when manufacturers concentrate on design, innovation and targeting a specific consumer need, there is still a healthy place for traditional OP. Frost reports significant success with Rapesco’s heavy-duty and easy-action products, such as its X5-90ps stapler (see left) that reduces the effort required by 60%. These are aimed at the office worker who needs to produce a high volume of documents quickly. They are also popular with people who may not have full strength in their hands. He further cites the value of offering product videos so potential purchasers can see an item ‘in action’ and says that reviews from customers who already own the product have become a significant additional marketing tool: “If somebody buys our product, uses it and then spends the time to actually write and post a review, then that’s the best advertising we can get.” These marketing techniques, coupled with Rapesco’s judicious use of social media, very much highlight the transitional nature of selling traditional OP in the digital age. Ma advises that focusing on niche sectors can also bring rewards. Carl’s Mori Station (see picture below) pencil sharpener, for example, is aimed at schools – it adds a curved point onto crayons that makes them particularly suitable for children creating pictures and colouring. She also reveals that digital crossover products, such as its Smadepot – a designer card case with an in-built iPhone stand – are now the main focus of its product development team. In summary, if manufacturers concentrate on brand value and innovation, while at the same time looking for unfilled, niche areas of the market, there could still be a bright future ahead for many.

Your OPI

5 minutes with... Richard Scharmann, CEO, PBS Holding

Describe what you do in less than 20 words. Running a service business that deals with products nearly everyone needs. Your first full-time job. Assistant Professor at a university. If you weren’t doing your present job, what job would you like to be doing? Drawing comic books. The best moment in your career. Becoming an owner of the business I am in now and recognising the meaning of total responsibility. The worst moment in your career. Hasn’t happened yet... The industry figure you most admire. Why? No one in particular, but many managers I meet. They know about all the details in our industry and still see the big picture. Your best piece of advice to someone who has just joined the OP industry. It’s more exciting than it looks. The most memorable travel experience you’ve had while in the OP industry? China and food always make for good stories...

“It’s more exciting than it looks”

What business/management book would you recommend as essential reading? I don’t read business books – I’d rather recommend Will Eisner’s graphic novels. The biggest change that has taken place in the industry since your career began. Ten years ago the industry was scared to death of the global players. Things have changed significantly – now owner-run, dynamic stockless dealers compete successfully against those players. What keeps you awake at night? A good book or gaming on my Xbox One. If you could invite two famous people for dinner, who would they be and why? Will Eisner (he changed the way comic books were viewed from simple newspaper strips to sequential art and graphic novels) and Billy Joel (I simply love his music). Your childhood ambitions. To become a fighter pilot. Have you ever done anything dangerous or daring? Parachuting and selling office products (at the same time?).

What do you think has been the best innovation in the OP industry in the last two years? Even more Post-it products being sold at a time when you would expect everyone has already been satisfied in their demand for that product category. Your favourite office product. Fine art drawing and charcoal pencils. What do you like least about the OP industry? Chasing for the best price in an industry where it’s all about service and processes. What do you like best about the OP industry? Creating exciting business concepts based on boring products.

Which character from a film or TV series do you think most resembles you? This character doesn’t resemble me, but I would love to find out what it feels like being Batman. www.opi.net | OPI Magazine

Your OPI

Final Word Your industry, your opinions

Jennifer Schulman, President, Fortune Web Marketing

Google rewards mobile-friendly sites ON

21 April 2015, Google rolled out its new mobile algorithm update. This update, which was larger than previous ones such as Google Panda (targeting content) and Google Penguin (targeting links), essentially removes websites from mobile search results that are not mobile friendly. Thus, rewarding those that are. Google has been very vocal on its stance about mobile recently, so this announcement was not surprising. In November 2014, Google added the ‘mobile-friendly’ label in mobile search results. This was followed in January this year by Google alerting webmasters of mobile issues on their websites. In fact, these were all labelled as warnings, and webmasters were able to view each issue (or warning) in detail and take steps to correct it. This was the telltale sign that an algorithm update was coming, bringing us to February 2015 when Google officially announced the change on its Webmaster Central Blog. It said: “Starting April 21, we will be expanding our use of mobile-friendliness as a ranking signal. This change will affect mobile searches in all languages worldwide and will have a significant impact in our search results. Consequently, users will find it easier to get relevant, high-quality search results that are optimised for their devices.”

Google LOVES it. Enough said. But really, it’s because Google is all about the user experience and responsive sites are better in this regard. Plus, it means Googlebot only has to crawl one site, getting through the content and indexing it much more efficiently.

Points to be made There are a few things to keep in mind about this mobile algorithm update. Firstly, it’s big, really big, so ignore it at your peril. Secondly, it runs in real-time. Therefore, if you don’t have a mobile site yet but launch one next week, Google will start to index and show your site on mobile searches the next time it recrawls your site. Thirdly, analysis is done on a page-by-page basis. This means that if you have a few pages that are not mobile friendly, Google will simply penalise and not show those pages, not your entire site.

“Mobile usage is growing and people search/visit sites on mobile devices all the time, regardless of personal or professional intentions”

Take the test Google released a test to check if websites are mobile friendly (www.google.com/webmasters/tools/ mobile-friendly). If a site fails, there are still options: • Do nothing – probably not the best choice. • Build a mobile app – probably not necessary, costly and cumbersome. • Build a mobile version of your website – why do this when you can go responsive? • Go responsive – this is Google’s preferred method, so read on for more details.

Why responsive? Webmasters and marketers like it. It’s one website for all screens, one set of code, one set of SEO and one place to update your website. Users like it. One URL and no redirects. It’s the same content, so no matter what screens a visitor views your site on, it’s the same experience.

OPI Magazine | June 2015

Sceptics beware

There are probably still some of you out there that think you don’t really need a mobile site or it may not be a good investment at this time. This is common, especially from B2B clients that think their audience or customers do not visit their site from mobile devices. So here’s some food for thought... Stop thinking in terms of B2B and B2C. Mobile usage is growing and people search/visit sites on mobile devices all the time, regardless of personal or professional intentions. They expect a seamless and optimised experience every time, no matter what device they are using. Take a look at your analytics data. Fuel your case for a mobile site (or not) by looking at how many people visit your site from a mobile device or tablet. How many actually stay? Is your bounce rate high, is your conversion rate low? If so, it may be time to go mobile. You could essentially be ‘leaving money on the table’ and not even realise it. Want the Final word? Email editorial@opi.net

IN THE NEXT ISSUE • Big Interview with Nicolas Potier of Bruneau in France • Furniture Special including a broad look at the category, NeoCon review, analysis and interviews