Opi magazine 265 dec:jan b

BIG INTERVIEW

Connecting the

business products world

Radostin Kirilov

Office 1 Superstores International December/January 2016/17

INSIDE THIS ISSUE l l

Donald Trump for US President l ADVEO goes direct l EOPA shortlist announced Spicers prepares for Amazon Business l The importance of gloves l Paperworld preview

Special Issue

FACILITIES SUPPLIES

CONTENTS 14 Big Interview Radostin Kirilov tells the Office 1 story 22 Hot Topic What’s in store with Donald Trump in charge of the US? 38 Vendor Profile Pilot Corporation of Europe 42 How to... ...gain key insights from Google Analytics 45 Sponsored Profile Rapesco 47 Global Forum 2016 48 OPI 25th Anniversary 50 ISSA/INTERCLEAN North America 53 Big Buyer 2016 54 CORE Live 2017 56 Paperworld 2017

Special Issue

Big Interview – Radostin Kirilov, Office 1

Once one of the most intrepid OP companies around, franchise operator Office 1 Superstores International has pulled back from many markets since the global recession of 2008. But it’s clearly not done with exploring Special yet Issue FACILITIES SUPPLIES HOT TOPIC – DONALD TRUMP, US PRESIDENT-ELECT

29 Category Update The facilities supplies sector under the microscope

Special Issue

FACILITIES SUPPLIES

34 Research SCA raises hygiene standards

37 Interview Lyreco on all things PPE

REGULARS 5 Comment 6 News 58 Generation Game Monte Bambrough 60 5 minutes with...

Jonathan Smith 62 Final Word Jeff Bobroff

December/January 2016/17

For Trump, his ‘America First’ campaign has clearly resonated with vast swathes of the population, but there are mixed feelings from all business quarters over his trade and economic policies.

Only time will tell if his protectionist economic and trade stance will help or hinder the OP industry. As always, there will be winners and losers, but this time they could be more pronounced if Trump gets his way on some of his promised policies.

FACILITIES SUPPLIES

3

COMMENT

The OPI team EDITORIAL

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

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

EVENTS

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

PRODUCTION & FINANCE Studio Joel Mitchell +44 (0)20 7841 2943 joel.mitchell@opi.net Operations & Production Eda Sismanoglu +44 (0)20 7841 2950 eda@opi.net Finance Kelly Hilleard +44 (0)20 7841 2956 kelly.hilleard@opi.net

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 Follow us online

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Connecting the

business products world

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

W

elcome to your new-look OPI. Having just celebrated our 25th anniversary (take a look at our party pics on page 48), we thought it was high time we gave OPI another facelift. Nothing radical – our reader survey in May 2016 revealed that you like most things just the way they are – but a de-cluttering of content and a contemporary design refresh.

Thank you to our designer Joel Mitchell for making it happen during the very busy end-of-year period.

And, of course, there’s a new face and name on this very page. But as many of you will know, I’m actually rather an old face (certainly in OP terms!), having been involved in all things OPI for the past 18 years. So any feedback on design, content, new ideas – anything OPI-related in fact – please get in touch at heike.dieckmann@opi.net.

There was really only one Hot Topic this month and that’s the upcoming presidency of Donald Trump On the subject of content, there was really only one Hot Topic this month and that is the upcoming presidency of Donald Trump.

The OPI team and delegates from around the world congregated in Chicago for the 2016 Global Forum (see page 47) just days after Mr Trump’s election sent shockwaves around the world. It certainly added some extra spice to the event, particularly to the many networking opportunities. For some initial reaction of what’s in store for the next four – or even eight? – years, see page 22.

Macro and micro economics and politics aside, the Global Forum illustrated once again how important it is that business supplies operators across the channels are on the ball if they are to have a realistic chance of success in the years to come.

Technology and Amazon were some of the most used words on and off stage during the event, but so were category expansion and current M&A activities (ACCO Brands/Esselte and Staples and Office Depot in Europe spring to mind).

In terms of adjacent opportunities, nowhere are these bigger currently than in the facilities supplies sector, our special theme throughout this issue of OPI. It’s a big category, so we paid particular attention this time to the continual rise of personal protection equipment and, within that segment, to the emerging sub-category of gloves. Look out for the facilities supplies tab throughout the magazine which denotes these special sections. Enjoy the read!

Wishing you all a happy, healthy HEIKE DIECKMANN, EDITOR and prosperous start to 2017.

December/January 2016/17

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.

Out with the old, in with the new (year)

5

NEWS

Analysis: ADVEO goes direct European wholesaler ADVEO revealed its direct intentions at its recent annual event in Spain Selling direct to end-user customers was one of the strategic pillars unveiled by ADVEO CEO Jaime Carbó at the office products wholesaler’s ADVEO World event in Spain.

“If we want to grow, we need to implement a new business model that will go along with our resellers and that focuses on direct sales to medium and big companies, the development of Calipage, e-commerce and access to bordering markets,” Carbó was quoted as saying in a recent ADVEO press statement.

The irony of this move into the direct channel will not be lost on many in the office supplies industry who will remember that the sale of its 50% stake in the Ofiservice joint venture to its partner Lyreco for €69 million in 2011 paved the way for Unipapel (as ADVEO was still called at the time) to acquire Spicers’ operations in continental Europe and to launch its pan-European wholesaling model.

However, as ADVEO and other wholesalers in Europe have discovered in the past few years, the pure wholesaling model has its limitations. Secular declines in traditional products, the challenges of trying to combine office products and EOS/IT consumables wholesaling and the growth of online resellers have all put pressure on volumes going through wholesalers’ distribution networks.

HYBRID MODEL ON THE RISE It could be argued that the hybrid wholesaler/ reseller model is now the industry norm in Europe, with leading players including EVO and SPOT in the UK and PBS Holding in continental Europe having their own direct arms. In fact, even ADVEO itself, and groups such as Quantore and Alkor (formerly Majuscule), don’t operate a million miles away from a direct model via their company-owned dealer networks. German dealer group Soennecken also launched a direct division a couple of years ago.

ADVEO is making it clear that it will not look to compete head on with its Calipage dealers and other independent reseller customers through its direct operations. In fact, it has said that it will work with stockless dealers and Calipage members that are specialised in selling to enterprise clients to grow

www.opi.net

BIRD FEED

6

@NeedlerWorkwear Seen by @dawn_bainbridge, if you forget to bring your PPE to site you get given these, we love this idea! #PPE #Workwear

Jaime Carbó

their businesses. What the wholesaler really has its eye on is the 90% of the public sector and enterprise accounts market – clients with 500 or more employees – where its reseller partners don’t operate.

It may have appeared logical for ADVEO to try and make a move for either of Staples’ or Office Depot’s European contract units when they were still up for sale, thereby gaining an immediate strong foothold in that contract space.

However, that is not the route that ADVEO is following, according to the company; it says it will enter this market organically and is in the process of recruiting talent and developing its own IT systems for that very purpose.

Starting from scratch is likely to be a long and cumbersome process fraught with pitfalls – not least of which is whether the market even needs or can support a new entrant.

The trend is very much one of consolidation – there probably isn’t much business sense in starting a greenfield business especially given the current acquisition opportunities (which also include strong local brands such as Fiducial in France).

ADVEO hasn’t specified when it will officially begin its direct business, but it has confirmed that it is looking to introduce the model into all its markets.

Follow us on Twitter @opinews @OfficeCoffeeCo Great coffee fuels happy work culture @ ‫ ‏‬exubialtd Forget all the health benefits – this is why we really drink it! #officecoffee #coffeealldayeveryday #exubiate

Bureau Vallée to open in North Africa Office supplies franchise retailer Bureau Vallée has signed an agreement with Tunisia-based manufacturer Office Plast to develop the Bureau Vallée brand. Three stores are due to open in 2017 and the goal is to have a total of 25 stores in the market.

Italian wholesaler to rebrand Italian OP wholesaler Office Distribution is to change its name to OD+ as it widens its service offering and expands into new sales channels.

The company has also relaunched its GDN Logistics brand and will be providing several value-added services to both vendors and resellers to help them reduce their own supply chain costs and make them more efficient.

Cartridge Word UK & Ireland acquires European network Cartridge World’s UK & Ireland acquired the master franchise rights for France, Spain and Portugal as of 1 December.

This development will grow the network of Cartridge World franchisees to approximately 200 stores with combined revenues approaching €30 million ($33 million).

Apogee maintains standards Managed print services company Apogee has been recognised for its quality and environmental management with renewed ISO 9001:2008 and ISO 14001:2004 certifications.

Held at the beginning of December in Geneva, Switzerland, the 2017 European Office Products Awards (EOPA) judges had a tough day whittling down the record number of nominations into a list of finalists. The winners of the 14 categories will be announced during a special Gala Dinner which will be held as part of OPI’s Partnership event in Amsterdam, the Netherlands, on 8 March 2017.

Product Development of the Year l Brother International Europe – Mono laser all-in-one MFC-L6900DW l tesa – tesa Glue Stamp l The Navigator Company – Navigator Advanced l Trodat – The Trodat Professional 4.0 Business Product of the Year l Epson Europe – WorkForce Pro RIPS series l Fellowes – Privascreen Blackout Privacy Filters l Newell Brands – DYMO LabelWriter 450 l Pilot Corporation of Europe – FriXion range Product Design l Bi-silque – Prime Glass Mobile Easel l Durable – LUCTRA FLEX l Esselte – Leitz Style Desktop Series l Fellowes – AeraMax Professional AMII Air Purifier l Matting – Jobmate Touch Innovation of the Year l 2020 Digital Media – 2020Pro l ACCO Brands Europe – Nobo Nano Clean Steel Whiteboard l Brother International Europe – Brother QL-800 label printer series l Fellowes – Lotus Sit Stand Workstation l Newell Brands – DYMO MobileLabeler Product Video of the Year l Avery UK – Avery Labels and Design & Print l Esselte – Leitz Icon Labelprinter l HP – Spectre Laptop l Newell Brands – Sharpie Markers l Schneider – Slider Pen Series $2.68 billion

Forecasted worth the US recycled furniture by >€100 2020 Reseller ofofthe Yearoffice – sales million l Amazon l Büromarkt Böttcher l Lyreco

Reseller of the Year – sales <€100 million l Commercial l iba l Streit Service & Solution l ZenOffice Dealer Group of the Year l Advantia l Calipage l Office Friendly Dealer Association l Soennecken Vendor of the Year l 3M l Epson l Fellowes l Maped l Safescan Wholesaler of the Year l Exertis l JGBM l Quantore l Relef-Centre Marketing Initiative l Avery UK – Championing small businesses for the launch of Avery WePrint l Brother International Europe – ‘It’s less work with wireless’ campaign for the P-touch and QL device ranges l Fellowes – ‘Keep it Confidential’ with The World’s Toughest Shredders l Office Club – Cool Earth paper l The Navigator Company – Around the World in 80 Pages Global Writing Contest Young Executive of the Year Professional of the Year Industry Achievement No shortlist Winner announced on the night

$2.68 billion

billion Forecasted worth of the US recycled office furniture market by 2020

Expected number of smartphone shipments in 2016

December/January 2016/17

Quantore rejoins BPGI Netherlands-based multichannel OP player Quantore has rejoined the BPGI purchasing organisation after a two-year hiatus.

Quantore was a founding member of BPGI, but left the organisation at the end of 2014 when it joined European wholesaling group Interaction.

The relationship with Interaction didn’t work out, and now Quantore will once again become a member of BPGI from the beginning of next year.

EOPA 2017 shortlist announced

NEWS

IN BRIEF

7

NEWS

Richard Thompson passes away Former Zebra Pen UK Managing Director Richard Thompson has passed away after losing his battle with cancer.

Richard was a well-known and popular figure in the UK office products industry, his long and distinguished career seeing him occupying management positions at DYMO and Esselte in the UK before becoming Managing Director of Zebra Pen UK in 1992, a role he held for almost ten years.

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There’s also a Team TripIt area that includes a calendar, spending reports and central dashboard. The Pro version offers real-time alerts for delays and cancellations, seat tracker and VIP benefits.

For more information visit www.tripit.com

PBS expands private label options PBS Holding is further developing its private label offering after acquiring assets from Biella in Austria. The European wholesaling and reseller group recently acquired the marketing rights for the Donau brand in Austria as well as the customer base of Biella’s Austrian subsidiary which services dealers and major supermarket chains in the country. The deal comes about three years after PBS acquired Biella’s wholesaling operations and the Donau brand name in Eastern Europe.

PBS Holding CEO Richard Scharmann told OPI that the Donau brand would expand the group’s private label capabilities in the back-to-school and B2C channels. He confirmed that Interaction’s Q-Connect brand was still the “main pillar” in terms of the core private label brand in the B2B channel, while a new brand called ‘Office Products’ offers a more price-aggressive alternative.

(5%) (8%) OPI.NET POLL RESULTS

(50%)

Resellers, does MPS still represent a business opportunity?

www.opi.net

(37%)

8

NO YES HAVEN’T THOUGHT ABOUT IT LOOKING INTO IT

Midwest Office joins Regency Midwest Office, a fast-growing and progressive Illinois-based office products dealer, has joined the Regency Franchise Group network.

The company is using the alliance as a springboard to launch Midwest Select, a new online ordering and management programme for supplies, printed products, and promotional and apparel items.

Revamp for BOSS charity The BOSS Benevolent Fund has been given a more modern name and look.

The charity is now called The BOSS Business Supplies Charity, with the strapline ‘Caring for our people’. It has also revealed a new logo that ties in with the rebrand undertaken by BOSS earlier this year.

Bunzl acquires in Europe UK-based facilities supplies distributor Bunzl has entered into agreements to acquire two businesses – one in France, the other in Denmark.

Prorisk and GM Equipement, which are based near Lyon and in Vannes respectively, both sell personal protection equipment and first aid products to French consumers and distributors.

Copenhagen-based Sæbe Compagniet, meanwhile, is a distributor of jan/san products to a variety of end-user customers, mainly in the hotel, restaurant and catering industries.

New branding for AF Computer and office equipment cleaning product specialist AF International is gearing up for a brand re-charge and the release of some new concepts.

The official rebranding launch will be at Paperworld in January 2017 and will include a new logo and strapline.

UPS and Sealed Air sign strategic partnership Packing solutions firm Sealed Air has announced a strategic partnership with logistics giant UPS to help retailers, e-tailers and B2B suppliers achieve packaging efficiencies and reduce shipping costs.

NEWS

Spicers prepares for Amazon Business

Jeff Whiteway

Kim Thurgood

December/January 2016/17

UK wholesaler Spicers has realigned its resources and invested heavily in people, in part to deal with a fast-changing OP landscape that includes the anticipated launch of Amazon Business in the UK. Spicers/OfficeTeam (SPOT) Group CEO Jeff Whiteway said that over the past 18 months, heavy investment has been made in its network infrastructure – in particular its distribution centres and final mile delivery service. He expects the marketplace to continue to change at an accelerated rate and next year anticipates the arrival of Amazon Business into the UK. The collapse of courier service City Link – owned by SPOT Group parent company Better Capital – early last year, prompted Spicers to work harder on introducing its last mile delivery option, OfficeFleet. The City Link deal was originally introduced for its Brilliant Partners programme but apparently there was very little uptake of the service before it collapsed.

The Brilliant Partners programme is being relaunched after it was moved into the marketing department in August. Spicers Sales and Marketing Director Richard Ford said the new programme will help support loyal customers that want to work closely with the wholesaler, while its new Alliance Programme is designed to improve profitability for dealers by focusing on sales and removing costs through effective customer contact.

To support its new endeavours, numerous positions have been created throughout the company. These include welcoming well-known industry figure Kim Thurgood back to the fold as part of the Alliance team, along with the appointment of several new heads in the marketing, account management, and financial analyst departments.

Despite the investment, Better Capital revealed that it had written down the value of SPOT by almost £25 million ($31 million) in its recently published interim results.

That write-down – which now values SPOT at around £46 million – came about due to below-budget sales and profits at the office supplies group.

However, to be fair, Better Capital did confirm that SPOT is “trading well and profitably with good cash generation”.

9

NEWS

Dealer groups look back on successful EPIC event

US office products dealer groups Independent Stationers and TriMega have summarised the highlights of this year’s EPIC trade show which took place in Nashville at the beginning of November.

The EPIC highlights include: • Representatives from nearly 400 dealerships and total attendance of approximately 1,450.

• A trade show featuring more than 150 exhibitors: many first-time exhibitors and new product suppliers, and robust order-writing as dealers took advantage of show specials.

• The debut of EPIC Get-Togethers, a new enhancement to the event which allowed dealer attendees to schedule 15-minute one-on-one appointments with exhibitors that took place on the show floor, resulting in more focused booth conversations.

• Presentation of the EPIC Partner of the Year Award, nominated and (live) voted on by TriMega and Independent Stationers members to recognise outstanding support for independent dealers. This year’s winner was wholesaler Essendant.

• Education forums which were entirely peer-based sessions called ‘forDealers, byDealers’. These featured panel discussions, idea-swap sessions, interactive roundtable discussions on a variety of topics, and dealer-moderated sessions which focused on the sharing of best practices and exchange of real-world learnings and ideas.

• Several charitable initiatives, including ‘Spreading Cheer’ sponsored by TriMega’s NEXT group, where 150 attendees assembled magazines, toys, crafts and goodies in bright green boxes called Cheeriodicals that were personally delivered to sick children at the Children’s Hospital at Vanderbilt, as well as 50 boxes being shipped to the paediatric centre at City of Hope.

The event also included several fundraising opportunities for City of Hope, such the second annual Hike for Hope.

There was also the interesting news that the next EPIC event is being co-located with the all-important ISSA/INTERCLEAN North America 2017 show in Las Vegas. EPIC 2017 will take place from 10-12 September while ISSA/ INTERCLEAN North America 2017 is being held from 11-14 September.

(L-R): TriMega’s Mike Maggio and Independent Stationers’ Mike Gentile

$2.1 billion Estimated worth of the UK stationery market by 2021

$3.34

www.opi.net

billion

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Online sales in the US on Black Friday 2016

$2.1 billion

Estimated worth of the UK stationery market by 2021

WHO’S WHO IN OP

Top 100 new entry: Šarūnas Pranukevičius, Managing Director, Officeday

It’s all change at the helm of Baltics reseller Officeday, with Šarūnas Pranukevičius having replaced Tomas Mačernis as Managing Director in June 2016.

Pranukevičius is already very familiar with Officeday and its operations, having worked for Sanitex – Officeday’s owner – for 11 years. He has plenty of experience in business development and has been working with various product groups, including private label, as well as on the parent company’s brand strategy in the Baltics.

The reseller’s goals for 2017 include a real push of sustainable products to its customer base, a focus on print and promo solutions, and the offering of a comprehensive product as well as service portfolio in adjacent categories such as facilities and personal protection equipment.

Look out for more details on some of our Top 100 entries in the next issues of OPI and, of course, on opi.net.

UK industry sets fundraising record

Dozens of UK office products industry personnel gathered in the UK’s mountainous Lake District for the 29th annual charity Climb of Life (COL) event in November, organised by Graeme Chapman MBE in aid of the Institute of Cancer Research.

The group tackled ten of England’s most challenging peaks amidst some pretty atrocious conditions and in the process raised a record £102,000 ($128,000) in sponsorship to help fund the fight against cancer.

NEWS

What now for Staples’ UK retail arm?

Could it combine with Viking to form an omnichannel powerhouse?

In November, Staples revealed that it had agreed to sell its UK retail operations to Hilco Capital for a “nominal” amount. The deal involves just over 100 stores across the UK with annual sales of approximately £200 million ($255 million). Staples said that Staples Retail UK made an operating loss of $17 million in 2015 and a loss of $6 million in the nine and a half months to mid-November 2016.

The reseller confirmed in a regulatory filing that it expects to incur a loss of between $70-$80 million in the current quarter in relation to the UK retail sale. That amount excludes the impact of “certain ongoing lease obligations” that Staples will continue to guarantee, a liability that it said could be “material”. In its most recently-published accounts to the end of January 2015, Staples’ UK retail operations had total lease obligations of around £30 million.

One thing is for sure: the Staples name will disappear from the UK retail channel because the brand name was not included in the deal We know the Staples name has to go and it seems unlikely that Hilco would develop a new brand from scratch. Viking still has a strong brand presence in the UK but has been struggling of late – private equity firm Aurelius, which bought Office Depot’s European footprint, would surely listen to offers.

What is more, there are probably several ambitious industry execs who would jump at the chance of bringing these underperforming assets together. And in the world of private equity, anything’s possible!

As this issue of OPI went to print, news broke that Staples had sold its European business to private investment firm Cerberus Capital Management.

The transaction is expected to close during Staples’ Q1 in 2017. Look out for more on this deal on opi.net and in the February issue of OPI.

December/January 2016/17

LOOKING AT THE OPTIONS What Hilco will do now with its acquisition is the subject of much speculation. One thing is for sure: the Staples name will disappear from the UK retail channel because the brand name was not included in the deal. Hilco said it will “phase out” the Staples name over the coming months, something that certain elements of the press equated to closing down the entire store network. That is one option, but by no means the only one open to the investment firm.

Hilco has appointed retail veteran and business turnaround specialist Alan Gaynor to work alongside the existing management team “to build a plan for success for the business”. Gaynor is no stranger to the stationery and office products market. He headed the Stationery Box retail chain – which was sold to Hilco in 2006 with around 60 stores and subsequently acquired by entrepreneur Theo Paphitis as part of the revamp of the Ryman network – and distributor JA Magson.

As Kypros Kyprianou, Group CEO of the Theo Paphitis Retail Group – which owns Ryman – told OPI: “Hilco have shown they are able to successfully wind businesses down and generate cash from their assets for certain stakeholders, as well as rebuild brands like they have done with HMV.” With HMV, for example, which Hilco bought out of administration in 2013, the store network was halved to around 60 outlets, but the business is now trading profitably. Could it do something similar with Staples?

Kyprianou is sceptical about the viability of the current model. “Staples’ [retail] challenges in the UK must be down to the ‘big shed’ model adopted here, as opposed to their ability to successfully source and retail office products,” he noted. “The positioning of the retail network is the main issue, so I can’t see what

future it has unless Hilco have thought of something that the very capable and respected people at Staples over the years were unable to think of.”

At HMV, Hilco relaunched the retailer’s website in 2015 and the investment firm itself recently brought digital capabilities in-house with the creation of Hilco Web. In this omnichannel world, it’s difficult to imagine a successful office supplies retailer without the support of a strong online presence. Therefore, a transaction that combined Viking’s online operations and Staples’ stores – branded as Viking and aimed squarely at small business customers – might make sense for the UK market.

11

Advance &

BIG INTERVIEW

RETREAT

Once one of the most intrepid OP companies around, franchise operator Office 1 has pulled back from many markets since the global recession of 2008. But it’s clearly not done with exploring yet, albeit down somewhat different avenues

O

ver the past 20 years or so, OPI has regularly reported on the adventures and exploits of US-based franchising operation Office 1 Superstores International. At the helm for a long time was founder Mark Baccash who, with great gusto, travelled to the furthest-flung corners of the planet to sell his franchising concept. Things have changed.

Now in charge is Radostin Kirilov and Office 1’s HQ have moved from Florida in the US to Sofia, Bulgaria.

The company’s portfolio of franchising partners and indeed its whole business model has also changed, almost beyond recognition. OPI’s Heike Dieckmann caught up with Kirilov in November to find out more about the priorities of the present and future – and to dwell a little on the past.

www.opi.net

OPI: Let’s start with some personal background and a career synopsis: when did you join Office 1 Superstores International and what did you do beforehand?

Radostin Kirilov: I joined Office 1 in 2001 as Sales Representative for Office 1 Bulgaria after obtaining my graduate degree in history. It was an interesting and promising entry level position. I liked the contact with people and it was always exciting to close a difficult sale. In 2004, I was offered a managerial position at the newly opened regional office of Office 1 International in Sofia. From then on, every step up the ladder has been varied and challenging in addition to having the opportunity of seeing the world and meeting incredibly interesting people.

As Managing Director, I am now in charge of both Office 1 and the newly created ChairPro company.

My core responsibility is to support our master franchisees in their geographical areas. As for ChairPro, my mission is to rapidly acquire experience and expand and secure this fast-growing business.

14

OPI: Where are your global headquarters now?

RK: Our headquarters are in Sofia, Bulgaria. Mark [Baccash] is not involved operationally now, but approves important new initiatives. The ChairPro business I mentioned, for example, is his personal creation and he is involved in anything to do with

brand image and strategic direction. As Managing Director of both Office 1 and ChairPro, I run the day-to-day business at our HQ in Sofia, which is also conveniently located within striking distance of the headquarters of our Bulgarian master franchisee Panda and our ChairPro showroom.

OPI: Office 1 has epitomised the concept of globalisation in the OP industry over the past 20+ years. But you considerably scaled back on the number of countries you are in. What happened?

RK: Our trajectory is a classic study of the turbulent cross currents of globalisation so vividly chronicled in OPI over the years. Our challenges were magnified by a number of factors that made for a rough but exhilarating ride until reality set in with the bursting of the bubble in 2008. The last OPI issue, devoted to your 25th anniversary, remembers wonderful times that were had at OPI conferences when the sky was the limit. A great paradigm of our industry’s roaring 2000s!

The demand for the Office 1 franchise model came initially from far-out emerging markets. It was hard to refuse the substantial initial fees thrown at us by

BIG INTERVIEW Radostin Kirilov

OPI: Years ago we had news of stores opening in countries like the Yemen, Sudan, Colombia, Vietnam, etc. These either didnâ&#x20AC;&#x2122;t materialise or, if they did, were short-lived. Then there were big plans for many other markets. What were the mistakes made? And what is your strategy now?

Our excesses were larger than most and so was our hangover RK: Well, each market had its own twists and turns and tales to tell. In Iceland, our master franchisee filed for bankruptcy and with government assistance bought back our contract and moved on solo to achieve greater heights when things rebounded. The business we created there is still the market leader but under a different trademark.

Other masters, like Ireland, sold to larger dealerships. Office 1 Lithuania moved its operation to a store-in-store model and bounced back very nicely.

Peru morphed into a chain of strategically-located copy centres. We managed to minimise the damage wherever possible. Some countries, like Venezuela or Haiti, were irretrievable and we let them go!

We never did the Yemen or Vietnam, that was a bridge too far. We indeed were in Sudan and may still

December/January 2016/17

local entrepreneurs eager to invest the money then sloshing around. Having acquired a reputation for success in negotiating these difficult markets, we then turned our eyes to less developed countries in Europe that were in a stage of rapid transformation.

We achieved significant positions in Lithuania, Slovenia, Slovakia, Ireland, Serbia and Greece. At the crest, in early 2008, Office 1 had stores in perhaps 30 countries. Mark once received a hilarious postcard from Irwin Helford, then visiting Sri Lanka, expressing surprise that he could not find an Office 1 store there.

Our excesses were larger than most and so was our hangover! We retrenched just as swiftly as we expanded. Meanwhile, cash dried up for the more leveraged masters in the cratered economies of Ireland, Greece, Iceland and Slovenia.

15

BIG INTERVIEW Radostin Kirilov

be for all I know – I am not eager to check. The Office 1 superstore in Libya still stands tall in downtown Tripoli, an impressive glass cube, and sales are good.

We should have conducted our interview there!

As an owner-managed company, we were quick to adapt and kept a tight leash on overheads even in the best of years. Some steps taken in our turnaround will be familiar to you: moving to smaller store sizes, creating a great e-commerce platform and going stockless where available, closing unprofitable stores, adopting a store-in-store model when practical, closing the US head office. In essence, what has changed in Office 1’s outlook is that the world has changed and we had to keep up or become irrelevant.

Our most proactive move that shall have the most impact going forward was the launch in 2014 of a new online venture, ChairPro, offering a large assortment of chairs targeting the mid and high-end markets.

We are now present in 12 countries. In two of these, France and Germany, we follow a pure e-commerce model. In Bulgaria, our biggest market, the master franchisee Panda cut down the number of its stores to a little over 50 and is in the middle of a national refurbishing and re-merchandising programme that will take us over a year to complete.

Sales are back to what they were when we had twice as many stores but so are profits and we are again opening new sub-franchises (in Bulgaria).

Radostin Kirilov in front of Office 1’s flagship store in Sofia, Bulgaria

Our trajectory is a classic study of the turbulent cross currents of globalisation so vividly chronicled in OPI over the years soon got listed by Google first or second in every chair category and by the spring of 2016, we felt ready to back what started as an online business with a 300 sq m (3,000 sq ft) showroom on a major artery leading into Sofia.

We are also launching a complementary ‘ChairProjects’ website targeting large companies to offer innovative workspaces and improve business performance. We can source almost anything needed to create beautiful, effective and adaptable interiors with products that help employees work better and feel good.

We also recently launched a duplicate ChairPro operation under a JV arrangement in Greece. This will follow the Bulgarian template. So our focus now is on Greece and Bulgaria and then one additional market per year, with Serbia perhaps next in line.

December/January 2016/17

OPI: Tell me more about ChairPro. Why chairs?

RK: We were searching for a new business with good macro trends and great potential that would utilise our IT expertise and offer accretive growth to our activities at Office 1.

ChairPro features a full assortment of some 3,000 chairs for a variety of clients. On large projects, we can tap into the depth of know-how available at the best global manufacturers and employ designers from a large local pool. We focus on ergonomic and innovative chairs and furniture. Manufacturers are now designing chairs to accommodate the human body as companies have been made aware of the

impact of ergonomics on productivity. There has been a redefinition of the corporate workplace from a focus on efficiency to one that enriches the emotional and physical well-being of people.

OP dealers have not developed as yet the expertise to sell such products. But the large, upscale manufacturers – major family-owned businesses with sales in the billions and a profound interest in the environment – prefer to distribute through specialised dealer channels.

So we created a separate company for ChairPro and our staff trained extensively at the factories of the more technically-advanced manufacturers in Europe. Like I said, www.chairpro.bg was launched in 2014 and the business is scaling up rapidly. We

17

OPI: What about Germany and France – they are the only countries with an online-only presence.

What are the main challenges in those markets?

RK: All our masters have websites but some, due to our retail heritage, are not as internet-focused as we would like. The businesses in Germany and France are stable to slightly growing now that the space has become so crowded. They are a nice little profitable operations with minimal overheads and sheltered within the large OP organisations of our partners.

Our challenges are no different from anybody else’s. Too many dealers, too many sites, too much similarity in the product offerings.

OPI: Broadly speaking, what is your business model now – how much B2B as opposed to retail – and how does it vary across markets?

RK: The Office 1 model is basically the same across Europe, with the usual mix of retail, telemarketing, e-commerce and contract deals. We run two separate businesses – Office 1 and ChairPro – with the same team and the attending economies of scale. Office 1 is expected to grow organically as we are not seeking new master franchises right now.

B2B continues to account for 50% of the business.

But physical stores remain surprisingly more important than we thought as a comprehensive study conducted in Bulgaria recently indicated, so I don’t see the retail business shrinking further any time soon.

OPI: You mention Europe. About half your markets are here now which is quite different from the past. How does the business model in Europe differ from that in, say, Indonesia?

RK: Yes, the bulk of our markets were outside Europe but not the bulk of our sales which were always Europe-based. Bear in mind that at some point we held the number one or two market positions in Turkey, Lithuania, Iceland, Slovakia, Bulgaria and Serbia, even Italy.

Indonesia is a unique market. Consumers there shop in malls and delivery is questionable due

BIG INTERVIEW Radostin Kirilov

to traffic congestion. Our master franchisee owns several chains of stores in the country and Office 1 is located as a store-in-store in selected outlets.

OPI: Who is your target customer?

RK: Everybody, with special emphasis on SMEs until ChairProjects reaches cruising speed and expands our ambitions.

OPI: Overall, where are your best-performing franchisees and why are they doing so well?

RK: Good management is always most important.

Strong finances, longevity and a great brand name also make for success. These are all present in Bulgaria and Turkey, our best and oldest markets.

I also have high expectations for a new master franchise in Greece which was launched a couple of years ago.

In the new ChairPro showroom in Sofia, Bulgaria

OPI: You attempted the Chinese, Russian, Indian and also Australian markets years ago, but retreated. Is it likely that you’ll venture back there at some stage?

RK: Some markets are impossible for outsiders to navigate. Cultural barriers, protectionism, xenophobia, distance, language, bureaucracy, corruption, pollution and often all of the above make them daunting.

India, Russia, Japan, South Korea and China come to mind. We tried all of them or rather they tried us and sent us packing! We were lucky in China after having spent very serious money to find a Chinese acquirer who made us whole at the 11th hour when we thought we would have to cut and run. We traded our Chinese mirage for his hard cash.

As to venturing back there… To put it delicately, we don’t have the endurance for abuse that we once had.

December/January 2016/17

OPI: Any thoughts on the major players that attempted the same as you and had to retreat?

RK: Ouch! It’s pretty hard to make money in Shanghai on less than 17.5% gross margin when your General Manager has a chauffeur-driven $250,000 BMW and his children are enrolled in the International School.

Toss in housing and travel allowances and factor in the many local reviews from home office specialists eager to visit the Terracotta Army of Emperor Qin Shi in Xian and other attractions, and you are soon in the red up to your ears!

OPI should chronicle one day how otherwise sober-minded managers lost their collective minds somewhere out there on the Silk Road! It would read like an Indiana Jones thriller and we can contribute our own chapter.

Let’s just say that at times Mark wondered whether he shared his salesmen with Lyreco and would exclaim in exasperation that he’d trade the whole lot of them for the aforementioned chauffeur.

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Radostin Kirilov BIG INTERVIEW

OPI: Are you competing with the big operators like Staples, Office Depot and Lyreco in any of your markets? If not – or even if so – what type of companies do you compete with?

RK: We never really competed against Depot or Staples. Our competitors have always been good local OP dealers and it gives us great pleasure to see that the best of them have survived and are doing well.

OPI: Do you believe Staples and Depot’s exit strategy in Europe will have an impact on what Office 1 is doing in countries like Germany and France, for example? Or has Depot’s exit in the past from various markets had an impact?

RK: We give both companies credit for somehow teaching us the business. Dealers and cooperative groups grew up quickly on account of the competition and the impact was felt as far as Russia and Japan.

Paradoxically, they had a much stronger impact on us by coming into a market than they ever did leaving it. We truly wish both companies well. One can’t help feeling bad when one reads that Office Depot sold its European operations for a ‘nominal fee’! It’s not funny.

OPI: Where are the best opportunities and core challenges now for operators like Office 1?

RK: The OP industry seems permanently doomed to live in interesting times and is uniquely positioned to get further buffeted by fast-developing trends.

Decline in the usage of traditional office products, commoditisation of major categories, changes in working environment, computer-driven strategies replacing active managers, decline in the number of white collar workers, budget reductions, new technologies in education, notebooks, tablets, smartphones, the office of the future, cloud-based systems, Amazon, drone delivery... you name it – the challenges are many.

But dislocations bring opportunities. We are optimistic that we are well positioned with ChairPro and other initiatives.

Margins suck. But we must live with them and sell more [...] adjacent categories

www.opi.net

OPI: There’s always a lot of talk about OP players needing to become a one-stop shop, offering a product as well as a service proposition, and venturing into adjacent categories like facilities supplies, etc. What is your view on that?

RK: These measures are all good and necessary palliatives. We have introduced them to the extent possible, but they do not address the winds of change cited above.

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OPI: What about margin trends?

RK: Margins suck. But we must live with them and sell more of the adjacent categories you’ve just mentioned until such time as they too deteriorate under the crush of overcrowding.

OFFICE 1 ROUNDUP Radostin Kirilov goes full circle and provides a short roundup of Office 1 since its inception.

In 1989, Mark Baccash founded Carlin with Spanish partners and the first superstore was launched in Madrid. To facilitate national expansion and make up for the lack of capital available, a franchising programme was started in 1991. It proved to be successful.

By 1993, there were 35 Carlin franchises (there are now close to 500 in Spain) and Mark decided to apply the concept to emerging markets.

These were all the rage in the 1990s and had the advantage of being out of the reach of the major office products players.

The first master franchisees, in Turkey and Bulgaria, were signed in 1995 and 1997 respectively under the Office 1 brand. Within about ten years Office 1 had expanded to approximately 30 countries.

In 1999, Office 1 extended its concept to emerging economies in Western Europe and did well until it got hit hard by the 2008-2009 global recession. In 2010, we decided to acquire expertise in e-commerce by partnering with strong local dealers in the markets of Germany and France. The online know-how acquired served to upgrade and optimise web marketing in most Office 1 markets.

ChairPro was launched in 2014. It’s the latest and perhaps boldest Office 1 strategic initiative to date. It positions the company in the promising area of the workplace of the future.

That pretty much wraps things up until 2020!

HOT TOPIC The US election has been fought and won. Although President-elect Donald Trump is having to wait to be sworn in as the 45th President of the United States of America, he’s certainly not waiting to shake up the business world

Apprentice?

THE

W

www.opi.net

hile many in the international community as well as the US looked on in shock as businessman Donald Trump became President-elect at the beginning of November, others feel it is merely indicative of a wider global backlash. It started with Brexit back in June, followed by the election of Trump in November, and just as this issue went to print, the referendum defeat in Italy, all of which point towards a populist movement by those dissatisfied with globalisation, the elite and liberalism.

Perhaps as never before, the future of the US business supplies industry is dependent on what the incoming President of the country will really do once firmly ensconced in the White House.

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AMERICA FIRST For Trump, his ‘America First’ campaign has clearly resonated with vast swathes of the population, but there are mixed feelings from all business quarters over his trade and economic policies (see page 25).

Only time will tell if his protectionist economic and trade stance will help or hinder the OP industry. As always, there will be winners and losers, but this time they could be more pronounced if Trump gets his way on some of his promised policies.

We say ‘promised’, as Trump has flip-flopped throughout the election on numerous topics with some being pure rhetoric; since winning in November he has also backed down or softened his approach on several issues key to his campaign.

A case in point is reversing his decision regarding the imprisonment of Hillary Clinton over the FBI

investigations into her use of a private email server while she was Secretary of State.

While many in the US applaud Trump for his thus-far tough stance on trade agreements such as the Trans-Pacific Partnership (TPP) and the North American Free Trade Agreement (NAFTA), others are worried about the impact the breakdown of trade will have, particularly on pricing. Indeed, Trump made his views very clear on Twitter in early December stating that tariffs would be imposed on imported goods (see @realdonaldtrump below).

The TPP – which Hillary Clinton also spoke out against – was used during the campaign to highlight the loss of US jobs. Supporters claim the 12-country trade agreement is designed to protect intellectual property and ease trade between Pacific Rim nations and the US. Per the official TPP website, the pact eliminates over 18,000 tariffs on Made-in-America exports and numerous other benefits, but there have been protests against the agreement, not just in the

@REALDONALDTRUMP The U.S. is going to substantialy [sic] reduce taxes and regulations on businesses, but any business that leaves our country for another country, fires its employees, builds a new factory or plant in the other country, and then thinks it will sell its product back into the U.S. without retribution or consequence, is WRONG! There will be a tax on our soon to be strong border of 35% for these companies wanting to sell their product, cars, A.C. units etc., back across the border. This tax will make leaving financially difficult, but these companies are able to move between all 50 states, with no tax or tariff being charged. Please be forewarned prior to making a very expensive mistake! THE UNITED STATES IS OPEN FOR BUSINESS

Did China ask us if it was OK to devalue their currency (making it hard for our companies to compete), heavily tax our products going into their country (the U.S. doesn’t tax them) or to build a massive military complex in the middle of the South China Sea? I don’t think so!

PUSH TO ECONOMIC STABILITY

“A historic race for leadership of this country. Our democracy has many checks and balances that do not allow any one group or person from making decisions that negatively affect the US or the rest of the world without much debate or thought. The idea of this democracy is that those elected to our government represent the voice of the people.

Let’s hope that this new government represents that voice well. It is apparent that the people in the US wanted change. We all hope that our country will heal its divisions and will push forward to economic stability and growth. If we can accomplish this for ourselves, it will do nothing but benefit the rest of the world.”

Greg Welchans, CEO, Supplies Network (US)

TRADE RELATIONS “Trump clearly believes globalisation is a major problem although his business practices do not demonstrate it. I think he will try to repatriate cash held overseas.

He will impose increased tariffs and duties on Chinese goods in order to try to stimulate US manufacturing etc.

Our trade relations with Europe will also be at risk – but China will be first, which therefore could benefit European manufacturers.

He will cut taxes for the wealthy and corporations so the B2B market and investments in new infrastructure will be positive for OP resellers. More buildings = more offices, meeting rooms, etc = more OP.” Beth Wright, Chief Commercial Officer, Bi-silque (Portugal)

ENTREPRENEURIAL DREAMERS WIN! “Stunned. Ecstatic. Ordinary folks came out and finally won. If he comes through which requires Congress to rally around him, small business and entrepreneurial dreamers win! The key concern will be the dynamic requiring 60 votes in the Senate to move a piece of legislation forward.

My hope is that Trump brings humility and a conciliatory vibe moving forward; we don’t need an ‘end zone’ dance by the President-elect or his key followers. Governing will no doubt prove more difficult than even campaigning.”

David Guernsey, CEO, Guernsey (US)

December/January 2016/17

US but also other countries including New Zealand, Peru and Japan.

Trump has promised to signal his intent to withdraw from the TPP – which incidentally doesn’t include China – on his first day in office. Removing the US from the TPP will certainly send a strong signal to the rest of the world that he is extremely serious about protectionism and prepared to ignore opponents which argue that rejecting globalisation will seriously hamper economic growth worldwide, which in turn will end up affecting the US economy.

In addition, although China is not part of the TPP, it has been working on a regional free trade deal that doesn’t include the US. The Regional Comprehensive Economic Partnership is formed of 16 nations from the Association of Southeast Asian Nations along with Australia, New Zealand, Japan, India, the Republic of Korea and China. This has some analysts worried that it will put the US at a disadvantage while raising China’s economic power and influence.

Talking of China, the country has been the focus of much of Trump’s wrath, to the point that he has called it a “currency manipulator”. Recently, he further invoked China’s anger by accepting a call from the President of Taiwan, upsetting international diplomatic protocol.

Another Twitter rant (see @realdonaldtrump above) posted in the aftermath of the aforementioned Taiwanese call have some onlookers worried that Trump is heading towards a trade war with China and other nations, which will undoubtedly cause some US multinationals to take action to prevent this. It also puts him at odds with many in his own party.

On the other hand, in its recent economic forecast summary, the Organization for Economic Cooperation and Development (OECD) said Trump’s expected increase on infrastructure spending and other investments, along with lower taxes, will help GDP in the US return to a moderate growth in 2017 and strengthen it in 2018.

However, it did concur that the risks to the outlook are “sizeable”, also adding that growth would be hurt if there were disruptions to international trade. OECD Secretary-General Ángel Gurría warned: “After the financial crisis and its legacy of debt overhangs and sluggish growth, the temptation to use protectionist policies to boost demand for domestic production is high. But world trade growth is already exceptionally weak. In 2016, we expect world trade volumes to expand by less than global GDP for only the third time in the past 30 years.”

Still, until President-elect Donald Trump takes the Oath of Office on 20 January 2017, everything is pure conjecture. His cabinet was not fully staffed yet at the time of going to print, and who knows what will happen between now and then.

Trump is playing by his own rulebook and nothing is likely to be simple or straightforward. It will be an interesting four years, not just for the business supplies industry, but for the US and the rest of the world too.

The OP industry speaks...

HOT TOPIC Donald Trump

@REALDONALDTRUMP

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Donald Trump HOT TOPIC

LET’S GET ON WITH IT

WILL CREATE A SLOWDOWN EFFECT

“Voter disaffection has given a result that was not expected by most experts.

There is a new trend among voters that has shown its face both in Europe and now in the US. The situation is new territory, with threats and a great deal of uncertainty as a result for the market and the economy, and of course for people in general. This will affect the OP industry not specifically, but as part of the market as a whole. In our market (Europe), the currency and free trade situations will probably be affected in different ways, and the uncertainty itself will create a slowdown effect.”

Stefan Sonesson, Managing Director, RKV (Sweden)

PRODUCTIVITY WILL RECOVER

“Having got the last three predictions wrong about Scotland leaving the UK, the UK leaving the EU and Clinton being a narrow winner in the US election, I think I should give up making predictions! Or at least label them with a serious health warning.

The good news about the result is at least it brings the election to a close.

We can all stop watching with fascination and get on with life as usual.

Productivity will recover. As one schoolboy tweeted: “How can I do my homework when all this history is going on around me?”

I believe the special friendship between the UK and US will continue to extend into an ongoing positive business relationship whatever type of Brexit we see ahead. If Project Wall can be put on the backburner for a bit, we in the UK are absolutely open for trade. The UK remains one of the world’s largest and most dynamic economies and we speak a type of English too!”

Phil Lawson, CEO, BOSS Federation (UK)

www.opi.net

EUROPE – NO DIRECT IMPACT

24

“First reaction: surprise. This shows that our western developed democracies and their elites have been blind to the resentment of a growing part of the population who has not benefited from globalisation and the digital revolution.

There is an obvious parallel with the success of Brexit, or to a certain extent with that of Marine Le Pen in France.

Second reaction: what now? What will Trump do? What policies will he really try to implement? Difficult to know at the moment.

Some key topics announced during the campaign: • Investment in much-needed infrastructures in the US • Much more control on borders and tougher stance on illegal immigration, but to which extent?

• Attempts at restraining free trade to protect local manufacturing, but how far can it go with China in particular?

• Tougher stance against ISIS together with Russia • Tax breaks for businesses and the wealthiest Third reaction: impact on the office supplies industry? The impact is not clear at the moment except perhaps the fact that low-cost supply from China or other Asian countries might be compromised in the future (if heavy duties are pushed and implemented under Trump’s administration). Also a more aggressive foreign policy towards Iran for instance could lead to some more instability which is never good for business.

For Europe and France in particular, I see no direct impact from this election as long as the global economy is not damaged.”

Nicolas Potier, Managing Director, JM Bruneau (France)

“One has to be careful of immediate thoughts. I think that is what Donald Trump reveals all too often and worries the rest of the world with! However, I feel like I did on 24 June waking up to Brexit: Step 1 – Shock. Can’t believe it!

Step 2 – Well, don’t blame me it wasn’t my fault!

Step 3 – Which muppets did that to us?

Step 4 – Check my slight degree of satisfaction that the underdog won and that some smug pollsters will lose their jobs.

Step 5 – Let’s get on with it!

Alex Tatham, Managing Director, Westcoast (UK)

A MAJOR SHIFT “I think in general the results are very much like the UK Brexit vote: people are sick and tired of the status quo and want a change. Not superficial change but real change. Donald Trump, for all his faults, is viewed as a total outsider who will impose change on the bureaucracy that runs this country.

How successful he will be is a question that will be answered over the next four years. His election could be the beginning of a major shift in how the US behaves domestically and on the world stage or, conversely, if his agenda bogs down or is stillborn, an indicator of just how firmly entrenched the bureaucrats are. Time will tell and I am not willing to take bets on how it will shake out.

Our industry will fare parallel to how the US economy fares. If Trump is able to invigorate investment and manufacturing, as he has promised, the economy and the business products industry will benefit.

Unfortunately, because he has no track record, no political past to compare, we just don’t know today how things will turn out. So everything you will hear between now and his inauguration is speculation.

The one indicator that could be a glimpse into the future is the folks he begins to pull in around him. As he starts to build his administration, a picture should emerge of what the next four years may have in store for us. Either way, this is just the beginning of what appears to be an interesting period for the US and for the world.”

Mike Maggio, President, TriMega (US)

UNCERTAINTY MAY AFFECT DEMAND “I think we still have a long way to go on this front.

China is a major trading partner for Australia. If the US put protectionist policies against China, it may flow on to the Australian market. We currently have a free trade agreement with the US, as well as the pending Trans Pacific Trade partnership (TPP).

Trump has committed to kill the TPP, but as yet we wouldn’t think that would affect the current free trade agreement – but we don’t know. All these factors could have a significant impact on our currency, and that most certainly would impact our market.

So there are many aspects to be considered.

But to call what would actually happen in the next four years with Trump would be a guess at best. My overriding concern is that uncertainty may affect demand, but I would not expect that to be significant in Australia in the short term.”

Gavin Ward, CEO, Office Brands (Australia)

AMERICANS WANT CHANGE

“It has been a shock after all of the polls reporting a Clinton win to wake up to a different President than the world expected. But as a British person I was also surprised by our Brexit vote, so I am having to rethink what I know and what surprises me.

I have a very pragmatic view on both events, which is once a decision is made we have a duty to make the best of any situation. Looking forward is the only solution and once change starts to happen how do we adapt and adjust to that change?

On the day of the result, I still went to the office, had my morning coffee, printed some documents and attended an internal meeting with lots of pens and pads being used.

This morning walking and looking around was the same as yesterday and I expect the same will be tomorrow. Of course, change will come and we need to start planning for it. What we are planning for though is the major question on all our lips.”

Mike Ayckbourn, EMEA Director, International Key Account Business Solutions, Benelux and Nordics, Newell Brands (Switzerland)

“The poll that I believed right from the start of this election season was that a majority of Americans want change. The exit polls proved it – 68% of voters want change. And they got it, in a huge way!

Now that the people have spoken, I trust that our elected leaders will show up to work, listen to the American people, seriously end the deadlock in DC, and compromise where necessary to solve some of our country’s challenges.

Gee, sounds like something I have heard about from some people in our own channel!”

Mike Gentile, CEO, Independent Stationers (US)

I’m going to renegotiate our disastrous trade deals, especially NAFTA – and we will only make great trade deals that put the American worker first – Donald Trump COULD BE POSITIVE “Trump’s election win was certainly a surprise, but

A TREMENDOUS OPPORTUNITY “After the shock and anxiety subsides globally because of the unknown, I think there is a tremendous opportunity for the American economy.

In my opinion, technology has been and will continue to be the main reason for our industry’s erosion not politics. If Trump can bring back the trillions of dollars that has been parked outside of the US, lower corporate taxes and lay out a plan to reinvest in our infrastructure, there will be a lot of jobs created which should be positive for our industry.

Also, with so many people claiming they would leave the planet if Trump was elected, I see a huge opportunity for supplying the first colony on the Moon!”

Michael Brown, CEO, HiTouch (US)

TRUMP’S PLAN TO REBUILD THE US ECONOMY BY FIGHTING FOR FREE TRADE 1. Withdraw from the Trans-Pacific Partnership 2. Appoint tough negotiators 3. Find trade agreement violations by foreign countries and end the abuses 4. Renegotiate the North American Free Trade Agreement or withdraw 5. Label China a currency manipulator 6. Bring trade cases against China for unfair subsidy behaviour 7. Use presidential power to remedy trade disputes if China doesn’t stop its illegal activities TRUMP’S ECONOMIC VISION 1. Create 25 million new jobs over the next decade 2. A pro-growth tax plan (every income group will receive a tax cut); a moratorium on new federal regulations; an America-First trade policy, a US energy plan (includes lifting unnecessary restrictions on all sources of energy); and the ‘penny’ plan (reducing non-defence, non-safety net spending by 1% of the previous year’s total each year) 3. Boost growth to 3.5% per year on average Source: www.donaldjtrump.com

December/January 2016/17

I suspect it had more to do with his ‘competition’, mixed with a little help from the FBI! The theory of a businessman rather than a politician running the largest economy on the planet could be positive, but will very much depend on how much of the campaign rhetoric is now unpicked/delivered.

I get putting your homeland first and was encouraged by his scripted acceptance speech in terms of building bridges in international relationships and trade. Time will tell, but with both houses in the same camp and a headstrong leader, driving change will undoubtedly lead to interesting times ahead!

No immediate impact on a UK-based business as following Brexit. The pound’s weakness has been a major factor for imported goods.”

Jeff Whiteway, CEO, SPOT Group (UK)

HOT TOPIC Donald Trump

BEST OF ANY SITUATION

25

“The first challenge will be pulling the country together. With Trump winning that leaves many people dissatisfied and emotionally concerned. For the country to move forward we have to get behind our new President. With that in mind, Trump has to be conscious of 50% of the country not supporting him.

With the Republican Party now in control of both houses you would assume that Trump will be able to push things through, but with so many of his own party not in support of him it may not be that easy to get things done. The beauty of our government is the checks and balance system we have.

The campaign was short on details regarding his policies on trade/NAFTA and many others. So what he truly plans to do is unknown, but his comments were enough for many Americans that want change to vote him in. I believe we will be living in ambiguity for a while until we truly see how all of this plays out. As a result, the markets may be a bit unsettled for a period of time.”

Harry Dochelli, President of Business & Facility Essentials, Essendant (US)

Predatory trade practices, product dumping, currency manipulation and intellectual property theft have taken millions of jobs and trillions in wealth from [the US] – Donald Trump TIME WILL TELL

“Donald Trump is above all a businessman. I therefore think that he is going to be very pragmatic and despite the sometimes worrying promises he has made during his election campaign (about protectionist measures, notably), I think he – and his advisors – will make sure they do not destabilise the international economy.

They might indeed raise taxes on foreign products, but their partners around the world would do the same thing… As the US is the second biggest exporter in the world, I doubt import taxes will be raised too much.

Our main concern is the exchange rate as the US dollar might become weaker versus the euro, which would penalise sales to the US by European companies such as CEP.” Cédrik Longin, Managing Director, CEP (France)

THIS MARKET IS RIPE FOR CHANGE “I think the impact of the US election result can probably be categorised into three areas with respect to impact on our industry: 1. Further economic uncertainty, volatility and impact on currencies that will exacerbate the current volatility with respect to exchange rates. Regardless of whether this volatility is having a favourable or adverse effect, it’s already clear that our traditional product categories and channels struggle with dynamic price changes – this could play into the hand of ‘challenger’ entrants in the e-commerce space that are able to react more quickly.

Any adverse effect will definitely force many into making more aggressive decisions around unprofitable brands, product lines and customers that they have not been willing to do so far, with only modest price changes generally ‘buffered’ down the channel. This will certainly throw a number of business models into question.

2. Regionalisation and local focus. I get the sense the US result coupled with Brexit is refocusing governments and hence markets onto their domestic scene in a much stronger way than ever before. Any weakening or significant impact on the domestic market in the US may force a retrenchment of focus and investment into local issues to the detriment of non-US markets. This will particularly affect US-based globals and obviously it may have the opposite effect of forcing investment in emerging markets and territories? There’s evidence of this already with Office Depot and Staples.

3. Catalyst for change. This market is ripe for change. The level of material change seen so far has been relatively low given the obvious need with respect to go-to market strategies, complex channel structures, poor use of technology and consolidation. Another ‘surprise’ result could just catalyse real movement and structural shift in our market…”

Steve Haworth, CEO, EVO Group (UK)

OPI.NET POLL RESULTS (20%) (43%)

(37%)

Will the Trump presidency be good or bad for the OP sector?

MUST WAIT AND SEE GOOD BAD

December/January 2016/17

“Donald Trump has won this exciting election although it seems that Hilary Clinton gained the majority of the votes. So based on this, Trump has to think about more than 50% of the nation who are dissatisfied and concerned – especially among younger people.

The Republicans have also gained the majority in the Senate and the House of Representatives.

Normally, you would say that it would now be easy to push things through, but Trump first needs to get the support of his own party.

So in the coming months we will see what direction it will go. Trump really needs to reveal what his plans are and he needs to keep his promises, otherwise an even bigger group will be disappointed. I expect that the US market will be more internally focused in the next few months and it will therefore create a slowdown effect.

After Brexit, this is the second time that polls are wrong with their predictions. As there are several upcoming elections in Europe, this could bring more uncertainty to markets. As a result of that, it will probably have an effect on economics, currency and trade situations as well. Time will tell!”

Jos Zimmerman, Key Account Director, Away From Home Professional Hygiene Europe, SCA (Netherlands)

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Special Issue

FACILITIES SUPPLIES

Special Issue

FACILITIES CATEGORY UPDATE SUPPLIES

The vast facilities supplies behemoth covers a plethora of areas that are now opening up to the OP dealer. OPI talks to the industry experts about their experiences specifically in the MRO and safety sub-sectors

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he facilities supplies (FS) sector is enormous and its boundaries continue to expand. The category now encompasses – slightly different depending on who you ask – everything from jan/san through to breakroom and catering, but also now increasingly sub-categories such as MRO and safety.

In the UK alone, the OP-accessible area of the facilities supplies market is considered to be worth £5 billion ($6.25 billion) according to Stuart Pearson, Director of Workplace at SPOT Group: “This will continue to rise and we see growth opportunities coming particularly from the public sector as budgets are reduced and it looks for innovative ways of delivering savings.”

In the US, meanwhile, the end-user market for this category represents a staggering $25-$30 billion in estimated annual sales, says Mike Schumpp, General Manager at R3 Safety: “But it’s a diverse market with multiple players in the channel vying for a piece of the pie. The challenge lies in knowing how to work effectively in this channel to produce a positive effect on the top and bottom lines.”

This reshaping of the overall direction of the facilities supplies market is also being seen on the other side of the Atlantic. “There’s now a strong focus on sub-categories such as health and safety,” says Debbie Nice, FS Product Director at VOW/EVO Group in the UK. “Demand is fuelled by needs, not wants – these products are essential purchases, with some of them helping users meet legally-required safety obligations.

“Both the MRO and safety categories fit well within our overall FS portfolio allowing us to sell additional lines to our existing customers. However, the diverse product range within these categories is a challenge.

We need to carry a large number of SKUs to make our offering credible.”

LUCRATIVE MARKET It’s estimated that within that overall FS spend in the US, about $8 billion is related to safety products.

Office products dealers have naturally been attracted by the revenue prospects of this potentially lucrative market and many are looking to get a foot in the door.

“OP dealers have always had an uncanny ability to ferret out adjacent opportunities to build sales,” says Schumpp, “and they are discovering that selling safety products is a great way to enhance their income and margins.”

KEEPING UP WITH REGULATION The need for legal compliance within an increasingly tight regulatory framework is one key driver that is forcing sales within the safety sector in particular.

As Pearson puts it: “Companies are now much more aware of their health and safety obligations and duties. Businesses recognise that simply sending someone to the local supermarket to buy consumer products could lead to non-compliance with legislation such as the Control of Substances Hazardous to Health (CoSHH) regulations.”

OP dealers have always had an [...] ability to ferret out adjacent opportunities to build sales December/January 2016/17 29

Facilities Supplies CATEGORY UPDATE www.opi.net 30

Personal protection equipment (PPE) under the FS umbrella is one key area where technology is driving development and making products more innovative and effective. Schumpp cites the Majestic PPE line of gloves as a good example of where advances in material science are aiding protection: “The product line’s new high-visibility insulated field coat is made from a material known as Westex – it’s flame-resistant and provides protection in intense work environments, while delivering warmth in extreme cold weather conditions.”

He adds: “The gloves are also made with new technologies – Majestic’s Concussion product is made with ‘Armor Skin’, a synthetic material that’s more wear and abrasion-resistant than leather and features a protective exoskeleton to shield against impact and shock. Other gloves are made with Dyneema Diamond technology, the new standard for cut protection. It’s the world’s strongest fibre – pound-for-pound 15 times stronger than steel.”

Gloves are a recurring theme mentioned by others too. Tom Hoffman, Director of Purchasing at US dealer group TriMega is keen to stress their importance in this category: “60% of the safety category is gloves – they’re everywhere and there are as many sources for gloves as there are customers. Their sales are the entry way into the safety category as much as coffee is for the breakroom. Dealers must map out a plan to sell them because of their widespread use within both their current and potential customer bases. Other opportunities include eye protection, ear plugs, head protection and protective clothing.

“Medical and health supplies is also an interesting adjacent category for OP dealers. They’ll find it hard to compete with the large supply houses when bidding for hospital business, but will find abundant opportunities in nursing homes, child care, school sports, dentists and health clinics.”

IDEAL BEDFELLOWS According to Nice, the safety and MRO sub-sectors are ideal bedfellows: “Both categories are driven by health and safety regulations and guidelines. The increase in work-related insurance claims is driving the need for products within this range, including ladders, trolleys, PPE and signage, for example.”

With categories like breakroom – and coffee in particular – and jan/san already on the radar of most OP dealers, Hoffman agrees that the next real, as yet unexplored, growth opportunity in the FS segment will come through from these areas: “Dealers need to get into the warehouse, manufacturing, automotive, cleaning services and outdoor maintenance zones. These drive the need for industrial grade products such as chemicals, wipes, mops and floor pads. Dealers will be interacting with a whole new type of buyer and can start talking about floor strippers, polishers, machines, degreasers, insecticides, etc.”

LED lighting is another potential related product area cited by Pearson: “A hotel maintenance

manager told us of how he’d replaced all the lamps in a large chandelier with LED bulbs. Not only did they pay for themselves in 16 months, he hasn’t had to replace a single one. It used to be a weekly task involving two maintenance teams, large access equipment and the need to fence off a big area in reception – but no more.”

60% of the safety category is gloves – they are everywhere and there are as many sources for gloves as there are customers FEAR FACTOR So if the safety category represents such a huge opportunity for OP resellers, why isn’t everyone jumping on the bandwagon and enjoying the ride? It’s fear, says Nice: “Dealers are discouraged because they feel they have to be product experts. However, the reality is that the health and safety officers within their customer organisations will know what they need and require.”

Indeed, this lack of confidence has made some OP dealers reluctant to stock these types of products in the past, says Schumpp. “We can give them access to safety products at competitive prices and also provide them with the necessary expertise on how to sell them. At R3 Safety, we are 100% focused on safety – it’s all we do. We are passionate about this category because we want people coming home in the same shape they left for work in.”

MRO and safety are clearly growth areas within the facilities supplies sector and with the right strategy and successful partnerships, they could prove as lucrative as other adjacent segments such as breakroom and jan/san under the broad FS umbrella.

Kerr Office Group (KOG) is an independent B2B office supplies dealer based in the US state of Kentucky. OPI speaks to President Brian Kerr about the company’s moves into the facilities supplies sector and the challenges that has presented OPI: When was Kerr Office Group founded and how has it developed over recent years?

Brian Kerr: It was established in 1939 as the Bean Publishing Company and started out as a small print shop for letterheads, envelopes and stationery. I became the General Manager in 1999 and we saw steady growth over the next seven years. In 2006, my wife and I purchased the company and have since made four acquisitions.

Today, we cover many categories including jan/ san and breakroom, safety, furniture, and floor and wall coverings. We also supply managed IT and print services and have our own interior design service. We operate out of three Kentucky locations, which gives us a wide market area that includes southern Indiana and northern Tennessee.

OPI: When did the firm first get involved with the facilities sector and what challenges did you face?

BK: We decided in 2011 that this was a category we needed to focus on. We hired a dedicated facilities supplies rep and made it a targeted growth area for the company.

It turned out to be a big challenge. We were competing with the direct jan/san houses and the cost of our goods just wasn’t competitive enough through our existing wholesale partners. We paid a visit to a fellow independent dealer, Sayes Office Products in Louisiana, where Kenny Sayes gave us some ideas on becoming more competitive and how to better market the FS segment of our business.

We started buying some key items such as bin liners and chemicals direct to obtain better prices and have grown from there.

CATEGORY UPDATE Facilities Supplies

CASE STUDY: BREAKING INTO FACILITIES SUPPLIES

OPI: What particular sub-sectors are performing well for you?

BK: We’ve recently started making progress on selling safety products. We also see MRO as a new growth opportunity and are focusing on making this part of our single-source package. Specifically, we’re concentrating on supplying equipment such as carpet extractors, auto scrubbers and floor-cleaning machines and are aligning with

The most important aspect is to have a dedicated specialist on your staff who understands the products and the industry a major manufacturer to distribute its products.

We’ve also trained our in-house technicians to service the products we sell.

OPI: What would be your words of advice for OP businesses thinking of getting into the facilities sector, but that have yet to take the plunge?

BK: The most important aspect is to have a dedicated specialist on your staff who understands the products and the industry. This is a strong growth segment and OP dealers really should look at making an investment in this area. It’s easier than it was previously because of the programmes that the dealer groups and wholesalers now provide. Businesses should take advantage of the marketing materials and SKUs they offer until they are able to stock some key items themselves and purchase them directly.

December/January 2016/17

OPI: Have industry partnerships helped you establish yourself in this sector?

BK: Definitely. Our dealer group, Independent Stationers, has added more direct facilities and MRO vendors in the last few years, with exceptional programmes to help with the cost of goods. Our wholesale partners SP Richards and Essendant have also made acquisitions in the facilities industry that have allowed us better access to products for next-day delivery. The team at KOG is now growing FS sales by around 34% year on year.

We still have a long way to go, but by continually gaining new direct partners we are able to win more business. Additionally, we’re a member of global cleaning association ISSA which also provides us with more contacts and resources to become better connected with the facilities and MRO industry.

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Facilities Supplies CATEGORY UPDATE

A SAFE BET

Walter Johnsen is Chairman/CEO of Acme United, a specialist in the MRO and safety market. His area of expertise is the first aid sub-sector, a somewhat niche area that the company has a substantial stake in OPI: How important is the first aid market to Acme United and how do you ensure you meet your customers’ needs?

Walter Johnsen: First aid products represent over 40% of our overall corporate sales, so its growth is very important to Acme. We’re one of the leading suppliers of first aid products in North America, supplying Staples, Office Depot, WB Mason, Essendant, SP Richards, Grainger, Fastenal, Bunzl and many others.

The first aid and safety market is highly regulated and requires expertise. Our customers expect Acme to share that expertise with their end users, whether by in-house training or calls to our customer support.

We are staffed to respond and rigorously train our team to be able to have the answers.

www.opi.net

OPI: What are the main reasons for growth in this market in your opinion?

WJ: The primary driver for growth in the first aid and safety markets is simply concern for the welfare of employees. It’s much safer to stabilise or treat an injury on-site than to delay and run the risk of infection, serious illness or death. Of course, avoiding an injury altogether and quick first aid action also save money.

There are many regulations that attempt to legislate for what is essentially common sense – avoid injury first, but if someone gets hurt seek attention immediately. In the US, there has been a change in regulations which has altered some of the items required in first aid kits and expanded the number of components necessary for workplace safety. The net effect of this has been a revamping of products in the field and the need for additional training.

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OPI: Have technological developments and progress in the treatment of wounds affected the first aid sector?

WJ: Yes, there have been many technological advancements. For example, there are now dressings that quickly stop the flow of blood.

Originally developed for war zones, these are now increasingly commonplace in industrial first aid kits. These new products truly save lives.

On a less critical note, Acme United has introduced a new phone app that scans the barcodes of any first aid consumables used to treat a person. It then automatically creates a replenishment order. This creates a continuity of refill demand between the customer and dealer and, importantly, helps ensure that kits are kept properly filled.

OPI: Do you think there any barriers to entry in this market?

WJ: Many dealers want to expand into the first aid sector, but just lack the confidence to do so. That’s because the field is confusing and there’s a fear that they might harm someone or break a law.

However, with proper training and support they can gain that confidence and ensure they’re providing the proper items. And of course, we’re also available to provide that support and fill the gaps in their knowledge.

Special Issue

RESEARCH

FACILITIES SUPPLIES

SCA raises hygiene standards

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www.opi.net

or the past eight years, SCA has embarked on an ambitious project to provide a series of research reports – five so far – detailing the state of hygiene practices worldwide, with an overriding mission to raise awareness of the connection between hygiene, health and well-being.

The latest Hygiene Matters report (2016) was a joint effort between SCA and The Water Supply and Sanitation Collaborative Council (WSSCC), a United Nations (UN) entity devoted to the sanitation and hygiene needs of the world’s most vulnerable communities.

Launched during a special session of the 71st UN General Assembly, the report is based on a survey completed by 12,000 respondents in 12 countries. It explores three themes: an economic perspective on the value of hygiene; a social perspective focused

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6 in10 Have refrained from activities due to concerns about lack of hygiene or cleanliness

Global cleaning, breakroom and jan/san vendor SCA has committed to bringing the link between hygiene, health and prosperity to the attention of the world

If governments, businesses and civil society work together, we can build a world of peace, prosperity, dignity and opportunity for all by 2030 on the taboos and stereotypes around hygiene; and the role hygiene will play in social and economic development in the future.

SCA CEO Magnus Groth says: “We share our expertise and educate on the importance of good hygiene practices, and engage in activities across the globe such as educating children about the importance of proper hand hygiene.”

The report forms part of the company’s support for the 17 United Nations Sustainable Development Goals (SDGs) which were announced in September 2015 (see ‘United Nations Sustainable Development Goals’).

The global commitment to end poverty requires action from governments, the private sector, academia and civil society to achieve its aims in creative and innovative ways. “We need action from everyone, everywhere. If governments, businesses and civil society work together, we can build a world of peace, prosperity, dignity and opportunity for all by 2030,” UN Secretary General Ban Ki-moon said recently.

Special Issue

GOAL #6: CLEAN WATER AND SANITATION

SCA

Goal: To ensure access to safe water sources and sanitation for all.

Why? Access to water, sanitation and hygiene Is a human right, but still around 2.4 billion people lack access to basic sanitation services such as toilets/latrine. In addition, water scarcity affects over 40% of the global population and is projected to rise.

The effects: More than 800 children die daily from diarrhoeal diseases linked to poor hygiene.

Cost to correct the problem: Extending basic water and sanitation services to the unserved would cost $28.4 billion a year from 2015-2030.

Cost of not correcting the problem: Globally, over two million people die every year from diarrhoeal diseases, with poor hygiene and unsafe water responsible for almost 90% of these deaths. Financially, it is estimated to cost 4.3% of sub-Saharan GDP and 6.4% of GDP in India.

What can be done? Get involved in World Water Day (22 March) and World Toilet Day (19 November). The United Nations says that civil society organisations need to ensure governments are kept accountable, invest in water research, and promote the inclusion of women, youth and indigenous communities in water resources governance.

RESEARCH

FACILITIES SUPPLIES

HYGIENE MATTERS As Groth points out in the Foreword of the Hygiene Matters report, “good hygiene helps save lives and sustain prosperity”. This relates directly to Goal #6 – universal access to clean water and sanitation – of the United Nations’ 17 Sustainable Development Goals.

WSSCC Chair and Nigeria’s Minister of Environment Amina Mohammed goes further in terms of driving home the importance of clean water and sanitation, stating: “Poverty elimination is impossible without access to and use of safe water and sanitation. For too long, sanitation and hygiene have been taboo topics, often forgotten in development work, despite the 2.4 billion people on the planet who still lack access to them.”

The report highlights some important factors involving hygiene and sanitation. We all know, for example, that a lack of hygiene has an impact on workplace productivity, but it also influences participation in education and has an impact on the wider economy.

SCA refers to changing behaviours through intuitive and smart design. A simple change in handwashing attitude, for instance, can provide meaningful health benefits by minimising the risk of infections. New solutions in this area include self-sterilising door handles, automatic hand sanitisers for children, or an electronic hand hygiene reminder system.

Combining the need for water conservation and hand hygiene, the STAND sustainable sink/urinal solution reuses water from a sink above a urinal to rinse it out, while encouraging hand washing by having the sink immediately in front of a user.

Visit www.sca.com/en/press/publications/ hygiene-matters for access to the full report.

2030 GOAL #6 TARGETS INCLUDE: • Achieve access to adequate and equitable sanitation and hygiene for all and end open defecation, paying special attention to the needs of women and girls and those in vulnerable situations • Improve water quality by reducing pollution, eliminating dumping and minimising release of hazardous chemicals and materials, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally • Expand international cooperation and capacity-building support to developing countries in water- and sanitation-related activities and programmes, including water harvesting, desalination, water efficiency, wastewater treatment, recycling and reuse technologies

UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS

on the original – and successful – eight Millennium Development Goals.

The new goals call for action by all countries to end all forms of poverty and “they recognise that ending poverty must go hand-in-hand with strategies that build economic growth and addresses a range of social needs including education, health, social protection, and job opportunities, while tackling climate change and environmental protection”.

December/January 2016/17

In September 2015, a historic United Nations (UN) Summit took place that resulted in world leaders adopting 17 Sustainable Development Goals (SDGs) as part of the wide-reaching 2030 Agenda for Sustainable Development.

On 1 January 2016, the SDGs officially came into force. While not legally binding, governments are expected to establish national frameworks for the achievement of the SDGs, replacing and building

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Special Issue

FACILITIES INTERVIEW SUPPLIES

Special Issue

FACILITIES SUPPLIES

Safety FIRST

W

hat does it take to be successful in the safety and personal protection equipment (PPE) categories? OPI speaks to Arnaud Bouchez, Lyreco’s Group Category Director of Industrial Products to find out about the reseller’s efforts in this area.

the customer base structure. For example, if you’re serving lots of oil and gas companies, the more chemical gloves or respiratory products you will sell.

OPI: What should resellers be looking for in terms of choosing a PPE vendor?

Arnaud Bouchez: For such a strategic project, it is key to talk to credible players only. In other words, vendors that can support the initiative across all the necessary geographies, with the feet on the street and the required level of expertise. There is a serious nature attached to safety due to the liability dimension. In addition, the necessary investment in time and resources should not be underestimated.

OPI: But is there a good ‘starter’ product for resellers maybe?

AB: It’s a tactical decision I guess. First aid kits may be an option, but if you want to be serious about the category, you need to address the big picture and talk about true PPE. OPI: Is it better to train existing sales people on PPE or hire specialists?

AB: Both and it’s important to take the time to execute and leverage it across the whole organisation.

OPI: What is the best way to gain the knowledge required for PPE legislation and standards?

AB: Aside from the available information and advice from industry associations, the partnership with vendors is key. But even this is not enough. It is an absolute must to invest in category and market experts to secure effective customer advice and long-term credibility.

OPI: How should resellers approach existing clients in terms of adding PPE/safety products to their basket?

AB: As soon as you know who your customers are, it is all about relevancy. You need to assess customers’ needs and behaviours and then plan the relevant campaigns around those. Pragmatism is needed.

OPI: What are the biggest selling PPE items in the OP space?

AB: This is difficult to answer from a general standpoint as this category is closely linked to

OPI: Are there any PPE product areas that OP resellers should avoid? If so, why?

AB: It depends on the customer knowledge you have and the PPE maturity level within your business. Some safety-critical equipment areas such as powered air respirators or some gas detection products should obviously not be considered.

OPI: Any additional dealer benefits to adding PPE to the portfolio?

AB: It’s a nice journey to embark on and it also helps to review the value chain within your own business.

For more exclusive content, such as Lyreco’s own PPE category status, go to opi.net.

December/January 2016/17

OPI: What should resellers ask their wholesaler in terms of helping them become successful in the category?

AB: Safety/PPE are not commodity categories.

Having your wholesaler contribute to driving through category expertise, helping to select the right product, having samples available to test or use, etc would be of great value. And adding new products and promotions to keep up the good growth trend, of course.

Arnaud Bouchez

OPI: What are the latest trends in the PPE and safety categories?

AB: We are closely very looking at the Internet of Things. Some of the connected/smart equipment makes sense in the context of increased focus on well-being and health at work. Manufacturers are also driving more value with new materials that are lighter and more technical.

In addition, the adjacency of workwear and fashion is increasing – it’s all becoming more comfortable and more convenient.

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VENDOR PROFILE

ENJOY the ride

Are digitisation and handwriting contradictory terms? Not at all, says Pilot Corporation of Europe. The secret lies in the convergence between the digital and the physical world…

www.opi.net

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here’s probably no better cautionary tale about the brutal effect digitisation can have on a company’s business model than the story of Kodak. The quick spread of digital cameras from the late 1990s onwards effectively rendered Kodak’s print films – its main source of revenue – obsolete, thereby triggering its subsequent demise.

Is it so surprising that people ran away from analogue cameras? In hindsight, it is obvious that the user experience of photography development was a disastrous one: highly troublesome and costly.

The journey from purchasing the film to having it developed needed several intermediary steps to get to the final, desired result. And there was no particular enjoyment in the process – the journey definitely was not the destination.

Indeed, disintermediation is one of the main effects – beneficial or detrimental – of digitisation. In today’s world, taking photographs is instantaneous and it doesn’t incur any additional cost. Digitisation allowed for a radical suppression of all intermediary steps previously needed in the analogue age.

A QUESTION OF RELEVANCE Ever since Kodak’s freefall, every company born in the analogue era should constantly question itself about its attractiveness and relevance. In Pilot’s case: could handwriting be a troublesome intermediary step that people are eager to get rid of?

It is almost a Pavlovian reaction from many observers as well as the media when they consider the topic of handwriting and digitisation in the same conversation. Expressions like “The writing’s on the wall”, “Replacement by smartphones, tablets, keyboards and phablets...” pop up almost as knee-jerk responses.

But is this really happening? Let’s look at the facts and figures, because there is no doubt in Pilot’s mind that there is a place in today’s world for writing instruments. Or is that just wishful thinking?

According to research firm GfK, the writing instruments market in Europe has been growing healthily over the past five years: between 15% and 20% both in volume and in value. Pilot has contributed its fair share to this growth. At the same time, of course, the global market for tablets, smartphones, phablets, etc also continued to grow.

At the very least, what these market dynamics show is that there is no direct, established correlation or conflict between digitisation and the writing instruments sector – it’s just perception that the two should be linked in some way. In other words, the old definitely doesn’t make way for the new and there’s no tradition (ie handwriting) versus practicality (ie digital devices) scenario. It’s possible to enjoy using a tablet as well as a pen.

VENDOR PROFILE

TOWARDS A ‘PHYGITAL’ WORLD Consider the tremendous success of the Cultura chain in France (see main image, left). One of Pilot Pen France’s key customers, Cultura started as an arts and crafts store in 1998, precisely the time when the internet started to spread in Europe.

Now 18 years later and Cultura owns nearly 70 outlets across France. Entering one of them is like an ode to the analogue world: books made of non-digital paper, board games made of old-fashioned cardboard, wood and plastic, musical instruments made of real wood… A huge proportion of the shelves at Cultura are dedicated to creative stationery, arts and crafts, scrapbooking, and writing and colouring instruments.

This fondness of ‘physical’ leisure activities is not limited to the French market, but can be seen across Europe: Empik in Poland, Abacus in Spain, Idee-Shop or Boesner in Germany, Feltrinelli or Carturesti in Romania – all these chains are testimony to the fact that creative leisure activities are very much alive and kicking.

This comes as no surprise to Pilot. We know from experience that the use of writing instruments is far from being motivated just by a sole functional need.

Creating new enjoyable writing experiences is deeply rooted in our DNA.

We want to explore the whole realm of digital possibilities that can then be turned to our advantage All that said, the sector as a whole certainly faces some serious obstacles and nowhere more so than in the B2B channel. Office supplies resellers in Europe have been facing challenges over the past few years. Current trends seem to indicate that writing instruments have become less important where handwriting fulfills more of a functional need, while they have lost none of their magic when it comes to an enjoyable and/or useful experience.

The latter is evident particularly in the education sector: parents, teachers as well as children all recognise the many benefits of handwriting – its multi-modal dimension and its role in developing fine motor skills, touch, movement and thinking.

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The evolution of the writing instruments market

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- Base: 100 - In value (€) - Market of: ballpoint pens, rollerballs, markers, felt pens, highlighters, mechanical pencils, fountain pens, roller refills - Area: France, Germany, Great Britain, Italy, Spain, Belgium, Greece, Romania , Poland

December/January 2016/17

A NEW REALM OF OPPORTUNITIES At Pilot, we have long acknowledged the importance of being positive about the changes brought about by the age of digitisation. We want to explore the whole realm of digital possibilities that can then be turned to our advantage.

The most obvious opportunity lies in the increase of online shopping. It’s become a booming everyday reality, and even outside of pure players such as Amazon most traditional resellers have developed already or are now creating online shopping websites.

And all of them require their manufacturer partners to have a central set of product data to feed information to their online platforms.

To aid with these requirements – and recognising the need to dealing efficiently with its trading partners

Source: GfK

– Pilot is currently transforming its processes.

A new product information management system is currently being put in place in order to be able to work better with online shopping platforms, in the B2C as well as B2B area.

Increased exposure is another opportunity offered by online communication channels. There are many communities of stationery and pen lovers on social networks – simply type #handwriting on a social platform and you will see physical creations that find tremendous exposure online.

For the first time in 2017, Pilot will produce original and entertaining brand content to maximise the presence of its Pilot FriXion range online and celebrate its 10th anniversary. Each month, a short animated film featuring a different FriXion pen will be released.

Digitisation can also help ‘augment’ the physical handwriting and drawing experience. This approach took concrete shape in 2016 at Pilot with the launch of the FriX’Book, a colouring book that comes with a set of Pilot FriXion Colours and a free app. Once a page has been coloured, the app makes it come to life. Each page is an episode of a story, so that the whole book is like an animated short film that has been coloured by the author. Pilot’s FriX’Book shows how the digital and physical worlds can be combined to make an enjoyable ‘phygital’ experience.

Pilot believes that writing instruments will continue to play an essential role and that, unlike Kodak’s print films, with handwriting the journey is still the destination.

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Pilot Corporation of Europe

Pilot’s FriX’Book launched in 2016

Oct 14-Sept 15

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VENDOR PROFILE Pilot Corporation of Europe

Pilot’s convergence

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hat is digitisation bringing to the writing instruments table? OPI speaks to Ken Schoellhammer, European Brand Manager at Pilot Corporation of Europe to find out.

We believe that the ‘phygital’ convergence is a goldmine of new experiences yet to be imagined and designed, and that there are still endless ways in which we can turn digitisation to the good old pen’s advantage.

OPI: Digitisation and writing instruments – can the two work together?

Ken Schoellhammer: They absolutely can. Digitisation is a tsunami that we can’t fight against. It’s about adapting and it’s about variety. Pilot has been part of the writing instruments sector for almost 100 years. The market is doing fine currently and is well-managed.

We want to be very positive and embrace digitisation, rather than considering it a threat.

OPI: How do you instil this positive attitude within Pilot as an organisation?

KS: It’s an ongoing process and we are still working on this transformation. And clearly, it’s an everyday challenge as the digital world itself changes all the time. But what I find has been a real positive at Pilot

OPI: Has digitisation had any impact on your business in terms of revenues?

KS: No, we haven’t seen any negative effect. Our revenues are increasing year on year; it’s a gradual increase, but we’re definitely growing.

What we are seeing, however, is that our customers – the office supplies resellers – are facing challenges and we believe that’s very much due to pure online sales players like Amazon which is becoming a major competitor to them and a real threat.

OPI: Where’s your channel focus now?

KS: We’ve historically been very focused on the office channel and were perhaps less visible in B2C. But this has really balanced out and we’re now becoming a very strong B2C brand as well, due in large part to our FriXion range. Since we launched that range about ten years ago, we’ve been really pushing the B2C channel.

Our revenues are now higher in B2C versus B2B and we understand that B2C is where our growth engine is.

www.opi.net

OPI: Is that push a result of digitisation, in terms of exposure on social media, etc?

KS: Definitely in terms of having an all-round integrated campaign. We are still going on TV in many countries such as the UK, France, Italy and Spain, but all our TV campaigns are complemented by online activities. Digitisation has essentially multiplied the number of contact lines to our customers in general and specifically the general public.

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OPI: How should manufacturers of writing instruments approach the topic of digitisation in your opinion?

KS: Positively. Don’t be fearful or defensive about digitisation, but regard it as an opportunity rather than a threat. One important aspect to bear in mind is that the digital transformation is not a technical revolution, it is a cultural one. It’s a transformation that Pilot intends to achieve by being adaptive and inventive, and by finding in the digital realm new ways to boost our business, bring more entertainment to our fan base and enhance the physical experience.

We have to continue to believe that writing instruments still have a place in people’s daily life. The figures show us that they do is that the concept has the total support of the Pilot Corporation of Europe board. For example, this new software programme with all the product information that we are implementing – it’s part of our mid-term plan. The transformation into a so-called ‘phygital’ operator is one of the pillars of Pilot’s strategy and having the support of the top management is vital to be able to achieve that.

OPI: Finally, what does the future hold for writing instruments in your opinion?

KS: That’s a difficult question. First of all, we have to continue to believe that writing instruments still have a place in people’s daily life. The figures show us that they do. And it’s really important to keep being innovative and disruptive. Pilot launched some groundbreaking innovations over the past few decades. In the 1980s it was liquid ink, in the 1990s gel ink and in the noughties it was thermal ink with the FriXion range.

So I hope that the next big innovation will come soon. But apart from physical, chemical or mechanical changes, the most important thing is to explore the physical/digital convergence that I mentioned.

Ken Schoellhammer

GETTING

HOW TO...

analytics right

In the second part of OPI’s How to... guide to Google Analytics, Andy Crestodina looks at how to use this powerful tool to gain real insights

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ith Google Analytics, there are insights waiting to be discovered.

But are you finding these insights?

Are you getting the most from your analytics? Are you using Google Analytics for real analysis or just reporting?

Most people use analytics the wrong way. This article will show you four ways to get real insights from your Google Analytics.

THE WRONG WAY This is the wrong way to use Google Analytics: look at your favourite report, see if the line is going up or down; smile or frown; close Google Analytics and go back to your day. The problem with this approach is that it has no effect on your marketing. Nothing changes.

The right way to use analytics is to get a marketing idea; to ask a question that supports the idea; to find the report that provides the answer; to proceed with the idea (or reject it) based on the answer; and then to measure the impact.

See the difference? Website analytics is a decision support tool, not just a reporting tool. So let’s use analytics to ask questions and find answers. Let’s form a hypothesis, challenge it with data, then make better decisions and do better marketing.

There are more than 100 reports in Google Analytics, but we’re going to find insights from the four main types of reports.

These reports are organised into categories: audience, acquisition, behaviour and conversions.

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Marketing idea!

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Ask a question that supports the idea...

INSIGHTS FROM AN AUDIENCE REPORT If you need information about who is visiting, the information can probably be found here.

Marketing idea: Let’s build a tablet-friendly version of our website.

The site looks great on phones and desktops, but there isn’t a version of it specifically for tablets.

Maybe a ‘full fluid’ responsive website should be built that would look great on all screen sizes – phones, desktops and tablets.

Question: What percentage of our visitors are using tablets? Turn the idea into a question. Making the site fluid responsive will take time and money, so it’s important to understand what percentage of visitors would be impacted and how.

There are more than 100 reports in Google Analytics, but we’re going to find insights from the four main types of reports

Find the report that provides the answer

Reject the idea

Proceed with the idea

Measure the impact!

Answer: Look in Audience > Mobile > Overview to see data about tablet visitors. This shows you what percentage of your visitors are using which type of device. It also shows how engaged they are and how likely they are to become leads and subscribers.

Other questions that can be answered are: • What is the most popular path through your website? (hint: User Flow) • What are the lifestyle preferences of your visitors? (hint: Affinity Categories) • What percentage of your newsletter sign-ups are from outside my region? (hint: Geo) INSIGHTS FROM AN ACQUISITION REPORT If you need information about where people are coming from, the answers can be found in the acquisition report section on Google Analytics.

Marketing idea: Let’s be more active in social media, so more traffic, subscribers and leads can be generated.

INSIGHTS FROM A BEHAVIOUR REPORT Here you can learn what people are doing on your website, including information about what’s happening on your pages.

Marketing idea: Let’s change our website navigation!

Question: Which items in our website navigation are people engaging with?

Answer: To see the path that people are usually following from any page, go to the Behaviour > Site Content > All Pages report and click on the page, then click Navigation Summary.

You could also do this analysis with data from other reports, such as Audience > User Flow and Behaviour > In-Page Analytics.

Other questions that can be answered are: • Which topics are getting the most traction in our blog? (hint: All Pages + filter) • Which pages are the most popular entry points into our website? (hint: Landing Pages) • Which phrases are people typing into our search function tool? Are they finding what they’re looking for? (hint: Search Terms + secondary dimension: exit pages)

Next time you have a marketing idea, turn it into a question and then go and find the answer OBSERVING VS THINKING, DATA VS EVIDENCE There is an ocean of data in Google Analytics. And it’s fun to swim in the ocean. But it doesn’t really get you anywhere. If you’re just looking at reports, without answering questions, testing hypotheses or drawing conclusions, you’re not doing analysis.

Next time you have a marketing idea, turn it into a question and then go find the answer – it’s the biggest difference between good and great marketing.

There are four main types of reports available in Google Analytics

Andy Crestodina is co-founder and Strategic Director of Orbit Media Studios, a US-based company dedicated to web design and development. To read Crestodina’s original blog, visit: www.orbitmedia.com/ blog/google-analytics-reporting-analysis.

December/January 2016/17

INSIGHTS FROM A CONVERSION REPORT This section tells you how many people are converting into leads, subscribers (and customers for e-commerce sites) and at what rates. Here you can see if your marketing is working.

Marketing idea: Let’s ask for more information in our Contact Us form.

The more information we get from people, the better. More info equals warmer leads. Let’s ask for company size, project type, job title and area code.

Question: What percentage of people who visit your contact page fill out and submit the form?

Answer: Adding to it may reduce the percentage of people who complete the form. So let’s first understand where we are before we change anything. Add to the form, but make it an experiment.

If the percentage goes down, change it back. Then try the other approach of an even simpler form. That may increase the percentage of people who submit, converting from a visitor into a lead.

Other questions that can be answered are: • Which articles are inspiring people to subscribe to our newsletter? (hint: Reverse Goal Path) • What percentage of e-commerce customers visit more than once before buying? (hint: Path Length) • What time of day are people least likely to take action? (hint: Goal Overview)

HOW TO... Google Analytics

The target audience is using social media so by spending more time engaging with people on these social networks, more visitors should be able to be pulled in and they may become subscribers or leads.

Question: Which social network is sending us the most visitors? And visitors from which social network are the most engaged?

It’s very time consuming to build an audience on a social network. Using the data you already have, learn everything you can about visitors from social sources.

Answer: The Acquisition > Social > Network Referrals report shows how many visitors are coming from each social network and the basic levels of engagement: how long they’re staying and how many pages they’re seeing.

To see how likely these visitors are to become subscribers and leads, look at Acquisition > All Traffic > Channels to see the engagement compared to other sources and look at Acquisition > All Traffic > Referrals to see the conversion rates for specific social networks.

Other questions that can be answered are: • What phrases are visitors using to find us in search engines? (hint: Queries) • Have any blogs mentioned us lately? Who’s linking to our content? (hint: Trackbacks) • Email newsletters are most effective on which day of the week? (hint: Campaigns)

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ADVERTORIAL Rapesco

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PRODUCT EXPANSION And Rapesco has had plenty to promote and communicate in the past year, not least the expansion of its well-known and much-loved Supaclip fastening system which now incorporates a wider colour selection and the popular ‘heart’ and ‘emoji’ refill clips.

The company’s extended focus on colour has further seen the growth of its punching and stapling lines to incorporate on-trend colours such as soft

pinks and powder blues as well as the unveiling of several new ‘less effort’ lines.

Whether it be through verbal, written or digital communication, all these initiatives mean that Rapesco delivers high-quality information at every step of the customer journey. In addition to two-way conversations in the local market language which foster closer relationships with customers, Rapesco’s reseller partners will also notice an increasing presence at trade show events in the coming months, including OPI’s Partnership Event in Amsterdam in March 2017, as the manufacturer continues to deliver on changing the way its brand is perceived around the world.

Rapesco’s Trading Director Ken Trenberth says: “Our new approach is already delivering exceptional results, with 30+ new international customer accounts opened and buying from us in the past six months.

We’ve also just reached a significant arrangement with SP Richards in the US whereby the wholesaler will stock, catalogue and sell 27 of our key SKUs from January 2017, including Rapesco’s brand new ECO white range which offers premium quality products with a high level of recycled content – all without a price uplift.”

After nearly 60 years in operation, Rapesco still means business!

December/January 2016/17

illions of people have been relying on Rapesco products for decades.

Fast approaching its 60th anniversary – the company was founded in 1957 – Rapesco is a well-known brand that delivers design-driven stapling, punching and fastening solutions in an ever-changing marketplace.

As part of a determined effort to revitalise and change the perception of its brand, 2016 has seen Rapesco launch several new initiatives that have marked it out as a fresh and contemporary challenger – a brand reborn.

The company’s ‘We Speak Your Language’ campaign, which was Highly Commended at the BOSS Awards in the UK in October 2016, increases brand presence and awareness in international markets by removing the language barrier that can often stifle effective communication and hinder growth. Employing a multi-faceted approach, Rapesco developed a team of multilingual account executives covering languages and territories around the globe.

In another initiative, a total website redesign and relaunch saw Rapesco firmly focus on the consumer experience with short, concise product information, high levels of interactive content and a clear route to purchase from a choice of vendors. And again, with six language versions covering 22 individual markets and delivering bespoke content and routes to purchase options, Rapesco reiterated the commitment to its international markets.

The new website also uses links for sharing and following on social media. Incorporating Twitter, Facebook and YouTube as marketing channels has seen the company achieve some of the highest levels of consumer reach within the channel. It also resulted in the brand’s strong representation and presence among consumers’ own channels which represents a dramatic change from Rapesco’s marketing efforts in prior years.

With a host of brand new initiatives, focus areas and product lines, Rapesco is set to reach new heights

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EVENT

OPI GLOBAL FORUM REVIEW

TACKLING

the issues – big and small

T

he sixth OPI Global Forum, held from 13-15 November at the Sofitel Magnificent Mile in Chicago, was the biggest and best attended yet.

Approximately 130 senior-level executives from around the world gathered for a superior content as well as networking experience. The international flavour of the event was stronger than ever, with a sizeable contingent from Australia, Europe, Mexico and Canada attending, in addition to the many US delegates.

To see that we’re on the same track [as others] really validates that we’re going in the right direction Conference moderator Robert Baldrey was back by popular demand – he also moderated the last (and fifth) OPI European Forum in London in December 2015. After a brief ‘state of the industry’ address, he expertly guided the attendees through a packed schedule of presentations, panel discussions and roundtable groups over the two conference days.

Power panel (from L-R): Host Steve Hilleard, Jaime Carbó, Rick Toppin, Bob Aiken, Joe Doody and Jeff Hillins

December/January 2016/17

GREATER DEALER FOCUS For the first time since the Global Forum concept was launched in 2009, the independent dealer community (IDC) accounted for a sizeable proportion of the delegate list. And indeed, the roundtable discussion specifically aimed at progressive independent resellers, dealer groups and wholesalers was one of the best attended of all, testifying to the fact that a certain contingent of the IDC is fully embracing the challenges thrown at them.

As one dealer delegate commented: “At events like this all the various market trends are being talked about. To see that we’re on the same track really validates that we’re going in the right direction.”

In lieu of a big interview with just one person, OPI this year opted for a real power panel discussion at the end of the first day of the conference, with Essendant’s Bob Aiken, ADVEO’s Jaime Carbó, Staples’ Joe Doody, 3M’s Jeff Hillins and SP Richards’ Rick Toppin all in attendance. Hosted by OPI’s CEO Steve Hilleard, this panel aptly illustrated the calibre of the conference. And, given that Chatham House rules apply throughout – precluding us from divulging any

specific details – it also allowed them to be candidly honest in their views.

It’s safe to say all five panellists face challenges in their respective positions that perfectly mirror those of the industry at large. These include the challenge of growing margins and customer loyalty in an increasingly price-transparent world, the changing workplace due to, for example, the Internet of Things, and the increasing need to customise offerings and also include more content in marketing campaigns.

Overriding all other topics and the biggest elephant in the room predictably was Amazon, formidable in its customer reach and technological expertise. This makes the prospect of Amazon Business – already a reality in the US and since very recently Germany – an even more daunting one.

But while the topic of Amazon – and technology – was an omnipresent one, there were plenty of other issues that were covered in some detail and that delegates perhaps had a better chance of conquering: successful succession planning, exploring new product adjacencies, facing and combatting the threat of cyber attacks, engendering customer loyalty, etc.

One of the highlights of the event is the unrivalled networking opportunity that it brings. One delegate said: “The networking at the Global Forum is superb.

Being with other leaders in the industry, whether they be customers, competitors or non-competing vendors, has been really vital for me in being a successful manager in my own business.”

The next OPI European Forum will be held from 14-16 June 2017 at The Westin Grand in Berlin, Germany. For details, visit www.opi.net/EF2017.

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EVENT

25TH ANNIVERSARY

OPI celebrates As part of its 2016 Global Forum event, OPI celebrated its 25th anniversary with a party in The Signature Room on the 95th floor of Chicago’s John Hancock Center on 14 November. With a guest list that included some of the best-known OP personalities of the past few decades, it was a night to remember…

The spectacular view from the 95th floor of the John Hancock Center

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A snapshot of OPI’s 25th anniversary party

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EVENT OPI 25th Anniversary

Thank you from the OPI team for all the support given to us over the past 25 years. We hugely appreciate it â&#x20AC;&#x201C; Steve Hilleard, CEO, OPI

December/January 2016/17 49

EVENT

ISSA/INTERCLEAN NORTH AMERICA REVIEW

Fulfilling POTENTIAL

H

www.opi.net

uge crowds attended ISSA/ INTERCLEAN North America, the annual expo organised by worldwide cleaning industry association ISSA which was held from 25-28 October 2016 at McCormick Place, South Hall in Chicago.

“The last time INTERCLEAN was held in Chicago was 2012,” said ISSA’s Senior Marketing and Communications Director Lisa Richter. “A lot has changed in four years with the consolidation of the industry and the convergence of jan/san and office supplies, so this year’s event provided a unique opportunity for professionals in the [US] Midwest region to tap into the industry’s resources. The show included attendees from around the world, but it felt special to have it in our own backyard.”

Turnout was particularly strong, with a total of 16,637 visitors from 74 countries – a further increase on the 2015 figures. Exhibitor numbers were also up, with 740 companies showcasing their wares. Of these, 132 were new to the event and 20% came from a total of 28 countries outside the US. Both exhibitors and buyers cited the show’s sheer size and diversity as a core attraction and the desire to find innovative new products as the main reason for attending. First-time exhibitors were particularly impressed by the scale of the event.

“We had as many people visit our booth as we could physically talk to,” noted Mark Sisson, co-founder of ISSA Innovation Award-winning NanoTouch Materials. “We had to split up and talk to different groups just to handle the traffic.”

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BROAD APPEAL Much of this growth can be attributed to ISSA’s efforts to attract new audiences – it has recently formed new relationships with several OP industry heavyweights such as TriMega and Independent Stationers, as well as OPI. Alongside the expo, a range of ISSA’s alliance partners also held events in conjunction with the show – the Healthy Schools Campaign presented the Green Clean Schools Forum while the Green Sports Alliance hosted its Greener Cleaning Workshop.

Further evidence of ISSA/INTERCLEAN’s appeal was shown by four key industry groups choosing to

hold their annual conventions alongside the event while other associations from across Europe, Africa and the Asia-Pacific region also participated.

Indeed, following the show ISSA and the Association of Residential Cleaning Services International (ARCSI) announced that they are to merge on 1 January 2017. “We couldn’t be more excited about this merger and the benefits, resources, and power it will bring to our membership,” said ARCSI CEO Ernie Hartong.

A series of more than 60 educational seminars, workshops and presentations by industry experts was

Former Navy SEAL Rob O’Neill during his Never Quit keynote

The show included attendees from around the world, but it felt special to have it in our own backyard held throughout the four days. All these culminated in the keynote addresses on the last day of the event.

Heading the bill was Apple’s co-founder Steve Wozniak.

His session, entitled Going for Great: A Moderated Q&A with The Woz and advice that “never is anything easy the first time,” was particularly well received.

The 2016 ISSA Innovation Category Award winners were announced during a keynote by former Navy SEAL Rob O’Neill called Never Quit. This awards programme included entries of more than 50 products and services from cleaning manufacturers and service providers, with distributors, wholesalers and others throughout the industry reviewing all the latest innovations and voting to determine the ultimate five category winners.

Overall, attendees rated ISSA/INTERCLEAN North America as an unmissable event. “You just can’t get this information in your office,” said Lisa McKinney, owner of Rochester Residential and Commercial Cleaning.

Next year’s ISSA/INTERCLEAN North America will take place from 11-14 September 2017 at the Las Vegas Convention Center in Nevada, US. For the first time, it will be held alongside a US OP dealer group event – EPIC 2017 – which will take place from 10-12 September 2017 at the Bellagio, also in Las Vegas.

EVENT

BIG BUYER REVIEW

Growth

PLATFORM

B

ig Buyer continues to buck the trend of national office products trade shows and successfully held its 21st edition at the end of November.

As Beatrice Bernabei, Sales Manager Italy for Avery, told OPI: “It’s still an important show for us to present our new products, and in two or three days we can meet all our customers and get immediate feedback on our new catalogue.”

It’s a point echoed by Francesco Villa, General Manager of leading Italian franchising retailer Buffetti, who sees Big Buyer as the best platform in the Italian market to meet all suppliers over a short space of time and to pitch the Buffetti brand to the thousands of trade visitors at the show.

Purchasers expressed a preference for buying from an OP specialist [online or not] over Amazon A first-time exhibitor at Big Buyer was UK-based vendor Rapesco, which was attending the show as part of its European expansion. Group Trading Director Ken Trenberth explained that the company is now employing an Italian national and working with local distributor Tecnoteam, all part of its ‘go local’ strategy.

He believes that Rapesco will bring something “a bit different” to the Italian stationery scene in terms of design, colour and eco-friendly products.

Elena Cappelletti presents GfK’s research results

December/January 2016/17

CONTINUED RELEVANCE Another factor contributing to the continued relevance of Big Buyer is the presence of a large number of key reseller groups and distributors with their own stands.

That includes wholesalers such as Office Distribution and Esprinet – which is expanding its presence in the traditional office products space – and buying groups like In Ufficio and Pool Over as well as tens of distributors. One absentee this year was ADVEO which is focusing its marketing efforts on its ADVEO World Italy event taking place in February.

There was a handful of jan/san vendors exhibiting at Big Buyer this year, reflecting the product diversification of B2B resellers. And while the product line-up at the event remains heavily weighted towards the traditional stationery, office supplies, gifts and back-to-school categories, the diversification

strategies of traditional vendors were clearly in evidence. Durable, for example, is moving into the breakroom category with a new product line and has also developed an attractive range of tablet stands while Avery is targeting the name-badge category.

Ten of the country’s largest B2B operators – representing end-user sales of about €800 million ($900 million) – make up the trade association AIFU and the annual AIFU conference is one of the highlights of Big Buyer. This year was noteworthy in that the association recently partnered with research firm GfK to look at the purchasing habits of Italian companies. GfK’s Elena Cappelletti unveiled results of how Italian firms purchase their office supplies in front of a packed audience of industry executives.

The research – investigating 250 businesses that were divided into four groups, depending on their size – threw up some interesting trends. These included: • More than 60% of office supplies purchasing decision-makers are women.

• The average amount spent on office supplies per worker per year is €140.

• Almost 40% of Italian firms have used the same reseller as their main source of office supplies for the past ten years or more.

• Purchasers expressed a preference for buying from an OP specialist [online or not] over Amazon.

These findings, Cappelletti emphasised, should not lead to complacency about the longevity of ‘traditional’ purchasing habits in Italy, however. E-commerce is growing and Amazon is getting stronger – the effects may be somewhat delayed, but the need to transform is just as great in Italy as it is elsewhere.

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EVENT

CORE LIVE PREVIEW

Down to the

T

wo years after Essendant held its first Center of Reseller Excellence (CORE) Live event in Nashville, Tennessee – where the wholesaler also revealed its new name and branding strategy – business and facilities essentials suppliers and customers are invited to join Essendant at CORE Live 2017. The multi-day event will be held at the Mandalay Bay Resort and Casino in Las Vegas, Nevada, from 6-8 February 2017.

Essendant will provide consumer research, key trends, and new marketing and digital services

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Themed ‘Art, Strategy, Science, Revolution’, the conference will bring together a broad cross-section of the industry in an environment of interactive learning and engagement. It will explore best practices across a number of topics, provide access to industry leaders and the newest products, review the best sales techniques, and share the latest marketing solutions, all in an effort to make the wholesaler’s customers successful in an increasingly competitive market.

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CORE

“The expectations of business buyers are evolving faster than ever. Today’s most successful companies are continuously innovating, using a powerful combination of customer obsession, technology and data to improve their customers’ experiences and keep them coming back,” states Michael Hauck, VP of Marketing and Digital Services at Essendant. “To help resellers better understand this new market, Essendant will provide consumer research, key trends, and new marketing and digital services to help resellers adjust and adapt their strategies to be successful.”

CUSTOMER ENGAGEMENT CORE Live will offer Essendant customers the opportunity to engage with the wholesaler’s leadership team – there has been a fair amount of change since the last CORE Live event, starting at the very top with current CEO Bob Aiken – as well as experts in the areas of marketing, digital solutions, sales and merchandising. In the process, they will hopefully discover new approaches of how to embrace the art and science of winning in today’s market.

In addition, customers will learn about the key role strategy plays in achieving and exceeding their goals.

Being able to network with peers and create new connections will no doubt help in that endeavour.

Look out for more details about CORE Live in the coming weeks on opi.net.

Harry Dochelli, Essendant’s President of Business & Facility Essentials at CORE Live in 2015

ADVERTORIAL

PAPERWORLD PREVIEW

Looking AHEAD T

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he forthcoming Paperworld trade fair in Frankfurt, Germany, adopts a future-gazing theme this time, centred around the slogan of ‘Hello tomorrow’ From 28-31 January 2017, around 1,500 world-leading manufacturers and start-up companies will be showcasing in seven halls what the future has in store for the modern office and for paper and stationery products for the end consumer.

All of them use Paperworld as the most significant trade fair in the sector for introducing their new products and innovations.

The next Paperworld sees the return of Paperworld Plaza, the biennial concept aimed at members of the German PBS-Markenindustrie trade association that was first introduced in 2015. Plaza will move from its original location in Hall 3.1 to Hall 3.0 in 2017, along with many of its exhibitors. That said, not all association members have chosen to exhibit in Hall 3.0, but instead in the specific product segment areas relevant to them. Edding and Staedtler, for example, have taken space in Creativeworld (Halls 4.1 and 4.2).

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PLAZA CONCEPT RETURNS Fair organiser Messe Frankfurt is hoping that the return of the Plaza concept will help boost attendance and see an increase on the circa 37,000 visitors and 1,600 exhibitors that made it to the event last year. Says Paperworld Director Michael Reichhold: “We hope that the Plaza area will again be well received in 2017. With the many excellent new and innovative products from our exhibitors, I am convinced that it will, once more, prove to be a visitor magnet.”

A series of complementary events is also aimed at drawing the crowds. “We are investing in a very varied and high-calibre supplementary programme in order to strengthen the trade fair and create a unique networking and training platform,” adds Reichhold. Attendees can expect to see a host of special presentations, trend-orientated events and expert lectures.

A new feature for 2017 and part of the visionary office is the Future Office, held in Hall 3.0 alongside the Plaza.

This is a special exhibition which aims to give insights into how we will all be working in a decade. It will illustrate the changing face of the office, driven by new ways of working and collaborating in a complex digital

Michael Reichhold

CHANGING PLACES In terms of layout, in addition to the move of the Plaza from Hall 3.1 to Hall 3.0, all Hall 10 exhibitors – mainly Asian suppliers – will be relocated to Hall 1 near the main entrance. The move is due to construction work taking place on a new hall – Hall 12 – which will disrupt the traditional layout of Paperworld for at least the next two shows.

Other alterations see the writing instruments category move into Hall 4.0 with school supplies. With the new hall structure, Paperworld is now concentrated at the eastern end of the exhibition centre.

ADVERTORIAL Paperworld Preview

ES

Hello tomorrow . environment. The concept is based on a study called ‘Working Spaces 2025’ that shows how the landscape of tomorrow’s office will have to become more flexible, individual and sustainable.

“We won’t know how accurate we are for another ten years,” says André Schmidt, the exhibition’s architect. “However, I’m confident we’ll give a good impression of tomorrow’s working world.”

We are investing in a very varied and highcalibre supplementary programme in order to strengthen the trade fair and create a unique networking and training platform

LECTURES AND AWARDS Paperworld’s lecture programme will be running throughout the event, focusing on the latest key themes relevant to the international retail trade.

Plus, the show will be rounded off with the ISPA and Insider awards as well as the annual Paperworld Awards that acknowledge the winners in the categories of Product of the Year, Industry Face of the Year and Specialist Retailer of the Year.

For an in-depth interview with Paperworld Director Michael Reichhold, look out for the February issue of OPI.

December/January 2016/17

Also part of the ancillary programme are the Remcon Seminars in Hall 6.0 where Remanexpo takes place. Here, visitors will be able to find out about the latest developments in recycled printer supplies.

The seminars will feature a variety of presentations by representatives from the aftermarket industry.

Topics to be covered comprise pricing strategies, the colour market, intellectual properly, business inkjet, 3D printing, and opportunities and challenges for remanufacturers in the years ahead.

Other events that complement the products and services being shown on the exhibition floor include a repeat of the Sustainable Office Day where, in a series of lectures and discussion panels, experts will provide valuable insights into the latest developments in sustainability as well as address the challenges of eco-fair procurement.

ON TREND The Trend Show, in the foyer between Halls 5.1 and 6.1, is another perennial at Paperworld that will look forward to the 2017/18 season. It will provide visitors from the OP and stationery industries with ideas for putting together their product ranges and designing their retail outlets based on the latest trends in fashion, architecture and art.

The Mr Books & Mrs Paper show, in Hall 5.1, is aimed at retailers that seek to combine books, stationery and writing products in their assortment.

Curator Angelika Niestrath will be giving her insight into the latest trends in the book trade.

Another event that has proven popular in the past is the BMWi promotional area in Hall 6.1.

Here, young start-up companies will showcase what they have to offer in terms of fresh ideas and unconventional products, providing inspiration and helping visitors discover new and trendsetting ideas in office supplies.

Back by popular demand also in 2017 is the Paperworld Business Matchmaking Programme.

This initiative aims to foster contact between manufacturers and buyers before the event begins. It helps attendees find the firms most important to them and then plan meetings via an easy-to-use online platform, with assistance from the matchmaking team where required.

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GENERATION GAME

MILLENNIALS:

Uniquely qualified

I

www.opi.net

t may have all started with Moses. He carried his talking points on stone tablets. Then there were the snake oil salesmen. Given the gift of the gab (and deception) they could sell ice cubes to the Eskimos.

The traditionalist generation sold loyalty. These people networked via their institutions (churches, clubs, government and military) and worked in a chain of command culture. And if their sales were falling short of plan they’d make it up in effort. Giving it your all and a job well done were rewards in themselves.

Baby boomers rebelled against the institutions.

They wanted change. And they were optimistic enough to believe they’d have it. There was a boom in production of consumer goods and the promise of a good education for all. This is the generation that enjoyed a relatively affluent, opportunity-rich business environment. And the baby boomers are highly competitive. Winning, recognition and status replaced the satisfaction of a job well done.

Enter Generation X and an environment of scepticism. They were bombarded with information: a media explosion. This new barrage of transparency exposed traditional institutions and caused Gen Xers to count more on their peers and themselves to get things done. They are an extremely resourceful and independent generation.

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PERFECTLY POSITIONED And now the millennials. Smart, practical, tech-savvy multitaskers. They network via social media versus traditional institutions. They prefer a diverse workplace culture and they are collaborative.

Millennials are perfectly positioned and uniquely qualified to advance the sales profession. Sales is not an art. It’s a science. It’s not a personality trait.

It’s a business discipline. Sustainable sales success is produced by sales professionals who are – like millennials – smart, practical, tech-savvy multitaskers.

Being perfectly suited for something doesn’t necessarily mean you’ll do well with it. A tool or a talent is only useful and effective in the hands of someone who understands how it works. In sales, the tool is undoubtedly the process.

Every sales transaction follows a sales cycle.

Generally, the sales cycle progresses like a clock: clockwise from an opportunity, to prospect engagement, to a conversation, to a proposal, to a ‘yes’ or ‘no’.

Map your specific sales cycle. Then overlay the processes that are required to advance you through your sales cycle. Identifying an opportunity requires a lead generation process. Engaging a prospect requires an engagement method (email, phone calls, face to face, etc) and process. Your conversation is a process. Who do you speak with? What will you say?

Presentation of your proposal is a process. And finally, the ‘yes’ or ‘no’ from your opportunity is the end of the sales cycle but the beginning of the success ratio analysis.

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MAPPING THE CYCLE It is essential, at the end of your process, that you capture your close rate. How many ‘yeses’ did you get versus how many proposals you offered? Now that you’ve mapped your sales cycle, and overlaid your processes, you’ll be able to calculate your overall close rate and specific process success rates. Quantifying these success ratios will assist you in improving your overall close rate.

If your overall close rate is low, you may find that the quality of your opportunities is poor because you’re using old lead lists instead of social media. Perhaps you’re not using CRM. Or, most of your opportunities are not coming from personal referrals. Millennial skills that are effectively executed will produce superior sales results with less effort.

Monte Bambrough, Sales Productivity Coach

Sustainable sales success is produced by sales professionals who are – like millennials – smart, practical, tech-savvy multitaskers It may also be that the cause of your low close rate is elsewhere in your sales process. It may be in your prospect engagement method. It may be that your conversation is scripted and considered disingenuous. Or your proposal needs adjusting.

By mapping your cycle, overlaying your process and tracking your success ratios, you will be able to take productive action immediately. Millennial talent becomes an effective sales tool.

Of course, this science is also available to the traditionalists, the baby boomers and the Gen X sales professionals. They may find it particularly useful when selling to millennials.

Millennials must also bear in mind that while this approach mirrors who they are, it is inherently a tool designed to be customised to an unlimited variety of situations. It is not a one-size-fits-all method. After all, you will be selling to traditionalists, baby boomers and Gen Xers as well.

Monte Bambrough is an office products industry veteran with over 36 years of experience. He is currently a Sales Productivity Coach working with field and inside sales teams. For more information, go to: www.SalesProductivityCoach.info.

5 MINUTES WITH...

Jonathan Smith What scares you?

Not much really… except when one of my four daughters undertake another ‘adventure’. That started 15 years ago when daughter #1 sailed across the Atlantic and Pacific oceans with a mate, neither with any prior sailing experience.

Her three younger sisters have all had equally exciting adventures ever since.

Describe your current job.

VP Sales, Europe for Avery – it involves lots of travelling to customers and Avery locations all over Europe.

As a consequence, I know every inch of Heathrow Terminal 5 far too well!

Favourite author?

Anything written by Bill Bryson is brilliant.

What’s your most prized possession?

A Yogi Bear spoon that I got free with Kelloggs Cornflakes 50 years ago. It’s been replated many times and was the favourite spoon of all four daughters every morning. It caused more than a few fights!

Best compliment you’ve ever received?

You still working?

What makes you happy?

Spending time with good friends and family.

What is the hardest thing you’ve ever had to do?

Tell my daughters (by Skype to Australia) that I had cancer. Luckily all clear now.

Your worst ever job?

A holiday job mucking out pigs for 50p per day.

Your favourite gadget?

The Garmin Edge bike computer – makes me obsessed with the data of every ride.

What’s your life philosophy?

Carpe diem. Life’s way too short to procrastinate.

Optimist or pessimist?

Optimist.

What special skill do you possess?

I learnt to juggle at an Avery conference about 20 years ago. A very good teacher taught about 100 people in 30 minutes.

What word do you use the most?

‘Interesting’. It has a multitude of meanings.

What do you do in your spare time?

Road cycling every weekend.

What’s your specialist subject?

How (not) to bring up four teenage daughters in the same house.

Early bird or night owl?

Bit of both depending on the circumstances.

www.opi.net

Best way to spend the weekend?

Friday night with friends at the Two Brewers pub in Marlow. Cycling the Chilterns with family and friends on Saturday, and chilling with someone special the rest of the time.

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CAREER Q&A

If you weren’t doing your present job, what would you like to be doing?

Football commentator on MUTV (Man United TV) – no need to be neutral/unbiased.

What’s the best moment in your career so far?

There have been two: joining 3M in October 1981 and then Avery in 1991 – and having a totally unplanned fantastic 35 years in the OP industry.

What do you like best about the OP industry?

A total cliché I know, but it’s all about the people. I’ve worked with some amazing and talented people at both 3M and Avery, and done business with some ‘interesting’ characters all over Europe.

It has taught me a lot about people and business cultures.

And like in every other industry, there’s been an incredible amount of change in the OP industry in the past 35 years.

Special Issue

FINAL WORD

Getting a grip ON GLOVES

T

he National Institute for Occupational Safety and Health in the US estimates that 20 million workers use personal protection equipment (PPE) on a regular basis to protect them from job hazards. Gloves are considered part of this type of equipment a worker may use to protect him/herself from illness, harm or risk.

Work gloves are essential to many jobs across a wide range of activities and can often prevent serious injuries. According to a US Occupational Safety and Health Administration (OSHA) study, 70% of workers suffering hand injuries were not wearing gloves, while the hand protection by the remaining 30% was inadequate, damaged, or the wrong type for the type of hazard present.

www.opi.net

DIFFERENT NEEDS The safeguards needed vary from job to job and industry to industry. In the healthcare industry, for example, gloves may be used to prevent the risk of contamination from blood and other bodily fluids and/or germ contamination and dissemination. For food workers, gloves help prevent the transmission of viruses and bacteria, while in facilities cleaning and maintenance, they may be used for protection from chemicals, abrasions and exposure to germs.

Manufacturers in the area of electronics, meanwhile, use gloves to prevent product contamination. In other industries, such as construction, gloves may be used to protect from extreme temperatures, job site hazards as well as impact or vibration injuries.

The use of gloves has grown substantially over time. According to Allied Market Research, the global disposable gloves market in the US is expected to hit $7.9 billion in 2020. Some of the reasons for this growth include studies that have demonstrated gloves can be a crucial element in preventing injury or contamination if worn and used properly. Another explanation is that many industries must comply

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FACILITIES SUPPLIES

with local, state or federal laws or governing bodies such as OSHA to wear gloves as part of regulatory requirements. Even the American National Standards Institute requires gloves to be included in their first aid kits in order to be compliant.

One of the strongest rationales for growth in the PPE category is that safety pays in the workplace. OSHA states that a work safety policy can save a company 20-40% in associated costs. Thus, some companies instill a â&#x20AC;&#x2DC;best practiceâ&#x20AC;&#x2122; policy to ensure a safer culture that helps prevent or reduce injuries which lead to employee time off and higher worker compensation and/or insurance costs.

Jeff Bobroff, VP, Merchandising Business and Facility Essentials, Essendant

The growing PPE segment, and gloves in particular, are a win-win for the facilities market Working with wholesalers and manufacturers, resellers can obtain training to educate themselves on the products and intricacies of PPE in general and gloves specifically. It is crucial that resellers understand the hazards, needs and performance required by gloves to make the correct recommendations.

Understanding glove types, their uses and the kind of protection they offer, will help resellers suggest the right gloves for the job and environment. Fit and dexterity also play a key role, since employees will tend not to wear this equipment if it impedes their ability to do the job at hand. Furthermore, some products may need to be FDA-compliant or follow European directives for PPE. Another factor to consider is possible allergens.

To put this in perspective, disposable gloves account for 60% of PPE sales while the PPE category accounts for 50% of all safety and security sales. Opportunities abound within this safety category and resellers should be prepared to capture their share of this market.

With current economic trends of lower margins and expansion of competition, the growing PPE segment, and gloves in particular, are a win-win for the facilities market.

NEXT ISSUE Big Interview Craig Bartholomew, 360 Office Solutions Hot Topic Alibaba and its progress Category Update l Office technology l Writing instruments Events l Paperworld interview with Michael Reichhold l OPI Partnership/ EOPA

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JOB WELL DONE

19.09.16 17:33