“Our core focus has become agility — staying competitive in this market means solving any problem a customer might have.”
Insightive.tv: In recent years, what is the biggest change you have made to how you approach the market?
Gavin: In stepping back and taking stock of the business, the key thing we noticed is that we are specialists. We are able to supply clients with the ability to improve their workplaces, we supply advice and consultation on how to achieve improvements in workplace satisfaction, staff retention and productivity. We have embraced an underlying ethos of thought leadership. We no longer engage in traditional marketing. If we want to send out material on desking, for example, we will lead with articles about how ergonomics or standup desks allow people to work longer hours, more comfortably and more productively. If engaged with a client on the purchase of a printer, we don’t pitch a particular product but rather provide information about the things they need to consider — paper size, printer size, price per copy v.s. upfront costs. We lead people down a logical path that ideally leads them to purchase from us. But, we add value to their business no matter what they do.
Over the last 5 years, our main investments have been in technology — our website, business intelligence, SEO, SEM and analytics. Creating an automated and targeted marketing solution has been a key focus. Currently, we can feed information gleaned from website traffic into our marketing engine. That sends out relevant thought leadership that informs the customer and answers his needs. We can follow an IP on social media or online shopping to present the user with relevant advertisements. Lastly, the information is pushed into our CRM system, allowing our marketing team to follow up. This is accomplished through a modified version of Salesforce that we partially built in-house and retooled using another technology product called Fresh Relevance. This system has been in place for about 8 months and has created measurable conversions.
Our current focus is to bring all of our franchises up to speed with the technology systems we have built. One of the major transformation projects we want to undertake is to create an ERP Lite solution that can extend our capabilities to members that don’t have as much money to invest in the overall capacity. Our goal is to create a SaaS version of that software for $180-250 a month. Then we need to invest in the education necessary to allow our members to use these systems as optimally as possible.
Insightive.tv: The market has changed dramatically in recent years, not least being the debut of Amazon Business — do you consider these challenges a concern?
Gavin: Everybody loves to be scared by Amazon. If you look at their progress in the US and UK, it has grown dramatically, but it hasn’t taken over the market. Outlets in the US have been able to retain their business because of good relationships with customers. Amazon cannot offer the same kind of consultative services or consistency on delivery times. Orders coming out of their warehouses work similarly to ours, but contracts through third parties arrive in bundles anywhere from 2 days to 2 weeks later. Businesses don’t want to deal with 27 suppliers — they want to deal with one. One thing Amazon has done, however, is changed expectations in terms of price. One analysis showed that against a benchmark basket of goods on Amazon the cost in Staples USA was 60% higher.
To be honest, competition can be intense at times. But, I don’t see it as a challenge, I see it as exciting. I take solace from the fact that there are things we can do. The great thing about digital transformation and digital marketing is that it increases the amount of feedback we get from investments. Five years ago, we would send out marketing emails, flyers and catalogues — if there was a subsequent boost in sales, that was great, but we couldn’t correlate those actions. Now, when someone comes to our website, we can track what they do, we can see where they exit, we can value their basket and see the marketing that they have been in contact with. Although digital technology has changed the market, the clarity of vision that the same technology has offered us has made the job of adapting to that change easier.
Insightive.tv: What do you think has been your most valuable asset in adapting to these changes?
Gavin: The close and value driven relationships we have built with our clients have been really important. But, the quality of our team has been the key — both in regards to developing those relationships and adapting to changes in the market. We have leveraged external expertise during some of our digitisation projects. For example, we contracted with Andy Lark — former CMO of Xero. He is the kind of guy that can come in exploding with ideas and provide 6 months worth of projects in a single day. But, the core Office Brands team is the real magic sauce of our operation. We have 21 people in the core staff and 1,200 across the network. I take a very inclusive management style. I don’t believe autocracies work, you need as many points of view as possible.
At an industry event last year, our Head of Marketing and Merchandise, Margaret De Francesco, gave a presentation in which she laid out most of the technical capabilities of our marketing strategy. Some in the business were shocked that we would tell people our secrets. But, the secret isn’t what we do, it’s how we do it. In this instance, this was confirmed immediately. The next speaker was the CEO of Staples who quite honestly and flatteringly said that they have all our technology, but couldn’t produce the results we achieved. To put that in context, these are solutions we are implementing with an entire business team smaller than their HR Department.
People look at the stationery business and think that digital transformation is our worst nightmare. In reality, it has empowered our business by giving us the ability of reach. It has allowed us to target our efforts solely on the people who are actually buying our products. In any industry, the disruptive influence of digital is only damaging if looked at from the wrong perspective. Digital enabled our business to achieve things that would have been impossible in a standard market.
Paperless offices are becoming a norm and traditional stationery suppliers face competition from online retailers. In response, Office Brands has changed its business portfolio, service offering and marketing strategy. We sat down with Gavin to understand the technology and strategies he has implemented to retain Office Brands’ market share and deliver 3-5 percent growth, year on year as the stationery market slumps everywhere in the World.
Office Brands is Australia’s largest independent dealer group of business supplies. Gavin Ward became CEO in 2012 and has since led the company through a transformative time. “Paper-based filing and transactions are universally in decline. This business started around very simple workplace supplies — pens, pencils and fax rolls. But, this has diversified to a broad selection of products. This year, what the Market used to consider non-core products — kitchen and cleaning, furniture, health and safety requirements, etc. — will outstrip sales of core stationery. Office Brands growth success has been predicated on their ability to drive their business to emulate these trends.