There was a strong turnout at this year’s Big Buyer trade show in Bologna, Italy, at the end of November, despite the ongoing challenges that the Italian market is facing.
The 15 members of Italian trade association AIFU – which collectively account for about 25% of the Italian OP and stationery market – have seen sales drop by an average of about 5% so far this year. However, those that OPI spoke to on the tradeshow floor were pointing to an overall decline in the double digits, and as high as 25% in areas such as the public sector where budgets have been slashed.
With unemployment having climbed to above 11%, major spending cutbacks in the public sector and at large corporations, and the uncertainty surrounding parliamentary elections due next year, the consensus is for even more challenging market conditions in 2013. The economic situation has already led to some major developments in 2012.
Dealer group CCA – which includes the Blue Office franchise retail chain – went out of business earlier this year, as did tech distributor Computer Discount. A major talking point at Big Buyer was recent cutbacks at the Staples Advantage business in Italy, where it is understood that the company has let go its former Corporate Express sales team and will now handle global accounts in Italy from elsewhere.
There have also been reports of Office Depot in Italy making structural changes to its contract operations. Another casualty would appear to be wholesaler/distributor Polyedra, the business sold by PaperlinX earlier this year.
Marco Caimi of one of Italy’s leading distributors Caimi Luigi & Figlio said it was a good Big Buyer this year in terms of traffic, although he admitted that customers were not feeling particularly optimistic about the coming year. He thinks that the crisis could accelerate the modernisation of the office products channel in Italy, especially with respect to the relationships between vendors, dealers and the independent sales reps who dominate the sector.
C’ART’s Stefano Di Veroli told OPI that there has been a strong focus on cost cutting this year in order to cope with “this terrible crisis”. The retailer has also launched a strategy aimed at attracting traditional stationery stores – a sector which is suffering badly – into the C’ART family as the credit crunch is making it difficult for new franchisees to find the financing to start businesses from scratch.
Rival franchise group Buffetti is looking to overcome the credit issue by offering a low-cost entry option for new franchisees involving a smaller store format starting from just 30 sq m (300 sq ft). Buffetti has lost 50 members this year – mostly non-progressive, traditional retailers, according to Managing Director Francesco Villa – but is targeting 80 new franchisees over the next two years. Buffetti is also making good progress with its brand strategy and is on target to have 200 transformed to its new merchandising format – where over 80% of products are Buffetti private label – by the end of 2013.
A launch platform
Two well-known European vendors used Big Buyer 2012 as a platform for developing their Italian sales strategies.
Cleaning products manufacturer AF International has been present in the Italian market for a number of years, first in an exclusive distribution partnership and then, more recently, via Spicers and IT distributor Computer Discount. However, as the company’s relationship with Spicers has evolved, and with Computer Discount going out of business, AF now finds itself needing to establish new partnerships.
Former AF Sales and Marketing Director Luciana Rizzi is now working as the company’s agent in Italy and she told OPI that she had made some good contacts in both the IT and stationery distribution channels at Big Buyer. She said that the cleaning category in Italy is still relatively underdeveloped compared to markets such as the UK, France and Germany, and that this means there is strong potential for growth, even if the overall market is depressed.
Archiving and filing specialist Jalema used Big Buyer to officially launch its Italian subsidiary. CEO Wim de Goei flew in from the Netherlands to host a press conference in which he outlined the company’s strategy for the market. It’s fairly unusual for a company of Jalema’s size to launch a full-blown subsidiary in Italy. However, de Goei said Jalema wanted to have full control over its sales network and be able to offer its full range to resellers.
Via its third-party logistics provider in Italy it has a warehouse on the outskirts of Milan, so it can offer a 24-hour (in some cases 48-hour) delivery service nationwide. It also means that resellers can offer the full Jalema range, but don’t need to carry as much stock, something that will help with working capital requirements.
Running the Jalema business in Italy is Luca Borroni, ex-Managing Director of Office Depot Italy who launched the Viking business in the country.
Italian association’s green focus
Italian OP trade association AIFU is trying to raise awareness of green issues in its home market, holding a conference entitled Green Office at Big Buyer.
The Italians don’t have the greatest reputation for their commitment to the environment and, until now, there has been no real move to develop standards or even a green product database in the Italian office products industry.
However, that could now change thanks to the efforts of AIFU President Adriano Alessio, who sees it as something of a personal mission to change attitudes towards the whole concept of how green products should be marketed.
A survey carried out by AIFU covering both the distribution side (through its own membership of 15 B2B resellers) and manufacturers highlighted that very few players are paying much attention to the green question.
Alessio is now hoping his initiative will encourage more participation in the green debate and that the Italian office products industry can be a driver in establishing more meaningful green criteria in areas such as the public sector. As part of his action plan, he is aiming to organise a ‘Green Office Week’ in Italy, and wants to establish closer ties with public sector officials in order to achieve greater accountability on the government’s ‘Green Product Plan’, which appears to be open to some degree of abuse at the moment.
It’s a tough challenge that Alessio has set himself, even more so given the seeming lack of any real grass-roots consumer demand for green products.
The French trade association UFIPA is currently undertaking a green products initiative, and there have been other projects in Europe recently such as Sustainable Office in the Netherlands. With this new interest from Italy, now might be a good time for various European trade associations to explore the possibility of a common set of green standards for the OP industry.
Remanufacturers form Italian association
Four leading European cartridge remanufacturers launched an Italian trade association at Big Buyer. Armor, Embatex, Katun and KMP are the founder members of ARTI Italia, an association that is based on the same principles as the European association ETIRA, of which all four companies are also members.
The firms feel that a purely Italian organisation will have more sway in the market, especially on areas such as market regulations, dealing with clones and counterfeit product issues, and working with the public sector.
Katun’s Heidi Boller told OPI that there has been a great increase in the amount of clones being sold in the Italian market.