Big Interview: Becoming the trusted advisor

Moving the conversation with customers away from price and creating a 'stickier' relationship based on value-added services is an aspiration of many business supplies resellers. Helping clients achieve their environmental goals can be a key compone

OPI: Mark, could you start by giving us a quick overview of Staples’ sustainability vision?

Mark Buckley: The vision that we have as a company is that we really want to generate economic, social and environmental benefits for ourselves as a business, our customers and the community that we serve by leading the way in how sustainable business gets done. Whether you’re in Europe, Australia, Asia, the US, Canada or South America, it doesn’t matter: the overriding vision and focus for us is really around offering a full suite of environmentally responsible products and services.

From a global perspective, we¹re using ISO 14001 as a framework by which we all operate. In different parts of the world we¹re moving faster in some of these areas than in others. However, at the end of the day our goal is to become that trusted, sustainable business solutions provider and advisor for our customers wherever they may be.

OPI: You¹ve got five pillars to your sustainability strategy. Are these the same regardless of which market you¹re looking at?

MB: Primarily they are. We may call them something slightly different in the various markets, but those are really the five focus areas – not only in the four walls of our operations, but also within our supply chain relative to our suppliers and then also with respect to our customers.

OPI: Christian, perhaps you could add a European perspective.

Christian Horn: I think as we look at Europe, what we see is that we have a chance through our business relationships to help our customers understand and influence the impact they’re making on the environment.

Customers are looking to us and asking us what they need to do, because procurement managers are under a great deal of pressure due to all the sustainability aspects in their procurement programmes.

I recently attended a global CPO [Chief Procurement Officer] conference in London and they all look at each other and say: “Oh my, I need to work with my supplier because I need to quantify how my procurement programme reduces our environmental impact.”

So we very much focus on making things tangible and quantifiable for customers. Does that make sense?

OPI: Perfect sense, yes. There are a lot of things involved in all that. Is there any one thing you would say is an absolute priority?

CH: There are a few, but they all go back to the customer proposition. We ultimately believe that we can do a better job, but where we differentiate ourselves is in our ability to help customers streamline their processes in a proactive fashion.

Procurement managers need to quantify behaviour and they live and die by being able to quantify value. We can show customers the carbon footprint reduction that is generated if they give us another product category and group their orders, for example.

Staples is very much about trying to be the trusted advisor. I believe another key differentiator is around product selection and to avoid customer confusion with the multitude of eco labels – we cut through the jungle and make it easier for customers to make the right choices.

OPI: So, what is your approach to labelling products as ‘green’?

CH: We have created an overarching label called Easy on the Planet. It’s our own eco-responsible identification, but it¹s not just a standalone label – it relies on rigorous third-party standards or attributes.

I should point out that we¹re not trying to compete with other labels; it¹s more of a product validation that helps our customers make better choices. It goes back to the trusted advisor idea. We do all the legwork of selecting and flagging products as environmentally responsible, and hopefully the customer trusts us to do a thorough and accurate job.

For the customer or procurement manager that needs a higher level of detail, we can also provide the numbers behind the label.

OPI: You have different levels of ‘greenness’ don¹t you?

MB: We do in the US, where we essentially break it down into two buckets: one would be that of basic environmental features – what most consumers would expect from a product in terms of environmental performance – and then we have advanced features. In Europe, we only have one – Easy on the Planet.

What we¹re starting to see is a movement towards more of a life cycle view on products and not just attributes. For example, with paper products we might be looking at Forest Stewardship Council (FSC) as the third-party certifying body that talks about chain of custody for the fibre. I will look at post-consumer recycled content as a small attribute within the paper, but if that paper¹s being manufactured in a mill that is heavy on emissions, I would argue that it’s not as sustainable as we’d like.

There is a movement towards this approach, but in the interim we need to use these other certification standards and attributes until we get to that point.

OPI: What role does your sustainable innovation lab play in your sustainability programme?

MB: Great question. We have a strategic relationship with the Rochester Institute of Technology (RIT) in the US. We have a committee comprising both academia at RIT and Staples associates that is actually directing longer-term research on the impact of products and packaging, etc in the workplace.

We have a number of projects that are in the pipeline. This will be publicly available research – it’s not something we’re looking for any intellectual property on per se, but to move the market forward and have a better understanding.

We’re pleased to have this relationship and clearly the research is going to be helpful in terms of guiding the way that we think about products and services moving forward.

OPI: Going back to your customers, are their requirements and needs in terms of sustainability evolving in any way?

CH: What we really see changing is at the end-user level: the workforce is increasingly asking what their company is doing to reduce its environmental footprint, and that has an impact on procurement managers.

One discussion we are having with them is the huge difference they can make in their own ordering behaviour to improve our mutual business processes. This will take costs out of the process for them and also reduce their environmental footprint.

OPI: So, going beyond the purely transactional relationship?

MB: We’re seeing more requests from customers that look to Staples as the trusted advisor we referred to before. For example, they might ask how we are purchasing renewable energy or financing renewable energy projects. So we put them in touch with our energy groups or with our fleet group when they talk about fleet operations and what they can do to reduce their carbon impact associated with transport.

These types of things are not direct revenue generators for us, but put us in the realm of being that trusted advisor, providing additional information and perspective that help guide our customers on running their businesses more sustainably. It¹s not just about providing a SKU on a page and saying this product is more sustainable than that one.

OPI: Do you have any examples of how you have helped customers in this way?

CH: One example is a programme we had last year in Germany called EasyTree. We partnered with some of our vendors there and set up a programme whereby if customers spend a certain share of their purchases on environmentally conscious products, then we would donate a certain proportion of the revenue to an environmental foundation.

Not only did that involve planting trees, it also helped customers quantify their environmental goals. One of our largest European accounts is DB Group and it has a 2020 strategic vision. One of the pillars of that is to improve the company’s corporate social responsibility footprint and its aim is to become a sustainability leader.

Now, DB Group has around 12,000 suppliers and spends less than 0.1% of its procurement budget with us, so you could argue that we are completely irrelevant to DB Group as a buyer. Yet we were the runner-up in its global supplier awards in the sustainability category for helping it achieve its strategic environmental objectives.

The company that won helped DB Group reduce energy usage in its facilities by 40%, so we couldn’t compete with that. The reason we were recognised was because of EasyTree. Basically, we gave DB Group carbon emission reduction certificates clearly linking its buying behaviour to reducing carbon footprint.

The procurement team was able to quantify the contribution it was making to the overall strategy of DB Group and that’s a great example of how we are trying to help our customers achieve their own objectives and look beyond price. Now, would the customer be happy to pay 10% more just because we do that? No, but it¹s a key differentiator.

OPI: How successful have you been in trying to get customers to consolidate orders?

CH: We’ve actually been very successful and seen a significant reduction in small orders. It’s a carrot and stick approach, to be honest, and we are in the process of sharpening our trading terms with customers.

OPI: So they get better terms for fewer orders, that kind of thing?

CH: There¹s an aspect of them having to pay for certain things like a small order fee, but a lot of it is just about educating the customer.

Very often, procurement managers have no idea how many small orders their end users are producing. So sometimes it’s as simple as taking a stack of paper, going to the procurement managers and showing them all the orders for one pen, or one notebook, etc – and you’d be surprised how many of these exist – and then helping them understand the impact.

One tool that we have is a carbon footprint calculator. So we can sit down with customers and show them that their current small order behaviour generates so much in carbon emissions from our delivery fleet and our distribution centre. And we can also calculate the costs of processing and handling all these small orders.

If we can agree to implement even a small change, then that helps them achieve reductions in their carbon emissions and also takes processes out of the process cost chain.

We know some of our competitors will say we shouldn’t have a minimum order charge and that’s something we also hear from customers, but I believe it’s our responsibility to help educate customers on why it’s simply a bad idea using all those resources on ordering just one pencil.

OPI: What sustainability-related services do you offer, such as recycling, and how successful have they been?

CH: We recycled over 60 million ink and toner cartridges in 2014 so that’s something pretty big. It’s mainly that and electronic waste. Obviously, with our infrastructure and distribution network we’re always looking to do more and exploring new avenues to make these processes as simple as possible for customers.

We work with a wide range of partners globally to ensure that these facilities are available to customers whatever country they’re in. The US has some exciting customer recycling programmes, and it¹s an area where we are taking the lessons and applying them here in Europe.

OPI: The US is one single, large market. How much of a challenge is it carrying out these services in multiple markets with different languages, cultures and perhaps different requirements and needs, etc?

CH: We have a country-by-country approach – there’s not one provider that could do everything, so we have corporate responsibility staff assigned in every market to make sure we find the best solutions.

Then it’s all about finding the right partners in each market. We’ve worked hard to find the expertise to enable us to best serve our customers using the legislative framework and also the infrastructure in each country, and I think we’ve done a good job of meeting our customers’ needs.

OPI: Where’s corporate sustainability going in a broader sense? How’s it going to evolve in the next few years and what part will Staples going to play in that?

CH: I think it will be very much driven by the evolution in the workforce. This is already becoming very visible and we certainly see it ourselves internally with more millennials joining the company.

For employers, it¹s about winning the war for talent, and part of appealing to the right people is by being an attractive business. So I think the concept of companies – and our customers – putting a greater emphasis on raising the profile of corporate responsibility will become increasingly important to retain and develop the right people.

We can therefore expect employers to take more proactive measures to adopt sustainable business practices. Where we see ourselves is playing the role of the trusted advisor who can help our customers be better than anybody else. That is not just about educating them on how our business relationship can be more sustainable, but also very practically in helping them – with our solutions – achieve their sustainability goals; whether that’s with product solutions or supply chain and recycling solutions.

Another area where I think Staples will play a big role in our customers’ environmental impact is with our very strong focus on what we call ‘beyond office supplies’ categories, whether it’s facilities solutions, technology solutions, etc. We’re well positioned to drive a strong product consolidation agenda with our customers, and therefore be more relevant across more categories.

Even though our categories are typically less than 1% of what customers purchase, we’re usually the supplier with the most number of transactions because everybody uses what we sell. Your typical customers don’t buy too much blood plasma every year, but they buy pallet loads of toilet paper.

OPI: I guess your competitors are saying exactly the same thing as you as they expand their product ranges too. What differentiates Staples?

CH: There’s a scale component here. For example, the Staples brand is one of the world’s largest office products brands. So we probably have greater leverage to be more at the forefront of sustainable product innovation in what is a very important category, and I think ultimately our people will make the difference.

Another area where I believe we differentiate ourselves is that we’re driving a much more proactive dialogue with our customers and with their procurement managers on the subject of sustainable business practices. And frankly, our people are working extremely hard to make this part of the dialogue they are having with customers.

At the end of the day, I don’t think we have any particular magic wand or silver bullet that no one else has. It’s about how seriously we take this as top leadership and how much we walk the talk. And we take it very seriously indeed.

The five pillars of Staples’ sustainability programme

  1. Offering easy recycling solutions for our customers
  2. Selling more sustainable products
  3. Maximising energy efficiency and the use of renewable energy
  4. Eliminating operational waste
  5. Becoming a sustainability leader in the global community