It’s been ten years since OPI’s Heike Dieckmann interviewed Peter Basci, then CEO of Swiss reseller iba. When Basci sold iba – created by his father Ilo in 1939 – to Swiss giant Migros in 2010 as part of his succession plan, then Marketing Director Christa Furter stepped up to the plate and became his successor.
Under Furter’s leadership the company has gone from strength to strength, increasing in revenues from CHF55 million ($55 million) to over CHF90 million. In the original interview with Basci, the focus was predominantly on European reseller alliance EOSA where Basci was Chairman and which went through a particularly tumultuous period at that time.
EOSA is certainly mentioned in the following pages, but the emphasis this time round is very much on Furter’s achievement at the reseller – it recently won one of the two Reseller of the Year trophies at the European Office Products Awards (EOPA) in Amsterdam – and her broader position in the vast Migros stable.
OPI: First up Christa, congratulations on winning the Reseller of the Year award at this year’s EOPA evening in March. You certainly seemed surprised as well as thrilled about the win.
Christa Furter: I was! It’s a fantastic recognition for all the staff at iba for their hard work and provides great motivation to continue to do well. I also see it as a big ‘thank you’ to our customers and business partners – without them we wouldn’t have won.
From my own personal point of view, winning this award reminds me of the values and core USPs of iba and of the responsibility I have to lead this company.
Of course, it’s also a great marketing opportunity for us – customers want to deal with successful companies, so it’s a fantastic communication and marketing tool for us.
OPI: We first met when I came to Berne ten years ago to interview Peter Basci. But our readers might not be as familiar with you or indeed iba. Could you give a bit of background please?
CF: Sure. Before I joined iba I worked in several French mail order businesses for 17 years, first for Damart (thermal undergarments) in purchasing, then cosmetics firm Yves Rocher in marketing and lastly fashion retailer La Redoute where I was in charge of the complete start-up of the company in Austria where I was born and lived at the time.
I moved to Switzerland for personal reasons in 2004 and began working in a traditional Swiss mail order company for a short time. Through a colleague there I met Peter Basci from iba in 2005 and that’s how my iba and office supplies career started.
Initially, I worked for the OP reseller as a consultant to help Peter grow the business. At the time, he was evaluating whether he should employ somebody full time in a consolidated purchasing, sales and marketing role at iba. He offered me that job in October 2005 and I became Marketing Manager in charge of the company’s commercial direction with all the touchpoints that this entails, such as marketing, sales, e-commerce and purchasing.
OPI: Half a decade later you became CEO when Peter Basci sold iba to Migros and retired.
CF: Exactly. Peter sold the company in June 2010 to Migros and with his recommendation and Migros’ confidence in me, I became CEO. Another five years on, in 2015, Stéphane Willa – who at the time was my boss and CEO of multichannel company Office World – left and I became Group CEO of both companies.
OPI: Please tell me a bit about iba today. How has the company changed since Migros bought it?
CF: The most notable change is that we’re increasingly becoming a service and solutions provider, as opposed to just being a transactional, products-oriented business.
When we were sold, Migros asked us – and by that I also mean Office World – to come up with a strategy to substantially increase revenues. Iba stood at about CHF55 million at the time. The decision was to develop more service offerings.
Specifically, in addition to providing a complete one-stop shop of office supplies and many of the adjacent segments that we always hear about, we now provide consultancy services on furniture projects, for example, as well as consultancy and logistics for corporate printed materials. We also bought a dealer that specialises in managed print services called Tramondi Büro in 2012 and currently offer service contracts for the print fleets of mostly our medium and larger customer base.
In terms of logistics, we have expanded our range of services to large customers with complete outsourcing processes whereby we can service them from a separate warehouse and with fully-digitised business processes, including individualised e-shops, for example. Some of the cooperatives within Migros are our core customers for these activities. The needs of this type of customer are quite different from the small to medium-sized companies where we deliver small parcels from our HQ warehouse in Bolligen.
Overall, we have our strategic guidelines, of course, and we’re working closely together with the management teams in Migros in terms of harmonising and executing those guidelines. But in principle Migros supports very strong entrepreneurship in all its subsidiaries – it’s a cooperative – and we’re very much encouraged to keep our culture and be autonomous. So on the face of it, there’s no real difference to what you saw here at iba ten years ago.
OPI: Let’s cover some facts and figures of iba and Office World, such as sales and staff numbers.
CF: In terms of revenues, it’s 50/50, approximately CHF90 million for each company. Staff-wise, we have about 200 people at iba and 250 at Office World. The retail network at Office World comprises 24 stores.
OPI: I presume iba and Office World are competitors in some sense?
CF: Yes, they are to some extent, especially for small customer accounts. But each company has its own standalone customer target groups: Office World focuses on the B2C and SOHO customer while iba predominantly targets medium and large companies.
But we’re also complementing each other. Office World is a retail business and stocks ranges for the B2C customer that iba doesn’t – arts and crafts, for example, or school bags, technology accessories, and computer and printer hardware. Iba, meanwhile, is strongly focused on traditional office supplies and commodity products like paper, as well as consumables such as ink and toner.
OPI: What’s your core strategy at iba now?
CF: There are several strands to our strategy. Number one is to develop the solutions business that I referred to already, while at the same time maintaining a strong focus on small and medium customer accounts.
Number two is to develop our e-commerce offering and expertise. We are in the process of creating our new web shop. We’ve also recently gone live with our social media strategy, having tested it for the past few months with Facebook and LinkedIn activities.
In terms of product content, we are implementing a new product information management system whereby we aim to have really good technical as well as content product data. We’ve been working on this project for the past 18 months and we’re this year approaching the end – it’s a big milestone for us.
In the context of our one-stop shopping approach and e-commerce strategy, we’ve also been offering a new e-procurement solution for our bigger customers since March. The interest we’ve had so far has been very encouraging.
OPI: Is the same true for Office World, ie a big push for content marketing and a focus on e-commerce?
CF: It is. On the e-commerce front we’re doing well and are growing. We’ve also been increasing our social media activities at Office World since the beginning of the year. And I’m particularly proud of the work carried out and the results achieved in the area of product content and email marketing.
OPI: Let’s go back to the solution and services part of your offering at iba. What percentage of your overall revenues now come from the services as opposed to transactional part of the business? In other words, is the service business a value-add, nice to have, or a real revenue generator?
CF: It’s definitely a significant business generator and now accounts for about 25% of our revenues. Importantly also, the service part of the business is growing faster than the transactional business.
Perhaps the main benefit is that the combination of product and service allows us to attract customers in two ways. We have large customers, for example, that use our corporate printing service. But they also know that we have the logistics in place to supply them with all their product needs.
The combination of the two is great as it creates both loyalty among existing customers while also driving new customer acquisition.
OPI: What is the core customer base at iba?
CF: The majority of our customers are small to medium-sized companies which is very reflective of the Swiss market. Yes, there are the big corporate banks and other organisations, but the bulk of businesses fall in the small and medium-sized spectrum.
OPI: I guess the demands of your customers vary considerably depending on their size?
CF: There are certainly priorities and levels of importance. For the bigger customers, logistics are important, as are procurement processes. Simply put, the bigger the customer, the more of a system and process question it becomes.
Smaller customers really value the personal consultancy services we provide and the customisation options available – online and otherwise – as well as the one-stop shop aspect with a wide assortment. Fantastic customer service is very important for our clients. I have three members of staff, for example, whose sole purpose it is to source products for clientele that we don’t have in stock, or alternatively individualised products.
OPI: You just touched a bit on the make-up of the Swiss market. Can you elaborate on that?
CF: Well, the number one player in Switzerland is Lyreco. Office World and iba combined are the number two in the market and then there’s Office Depot Viking and Staples through its cooperation with a medium local player called Schoch Vögtli. Between us, we make up about 30-35% of the classic B2B market.
The rest is mainly medium-sized, privately-held competitors and then the smaller papeterias.
OPI: You said that the majority of your customers are small to medium-sized. I assume most of the big corporates are Lyreco customers?
CF: Most of them are Lyreco or some are Office Depot and Staples customers. We have won a few of the big accounts and it’s an active focus point for us to attract more of these players and to position ourselves well with the bigger companies.
Lyreco bought Büro Fürrer in 2005 and with that acquisition really specialised itself in big corporate accounts. We’ve only started building up our competence in this area over the past five years with all the procurement interfaces or tools that you have to be able to offer these accounts.
We had a big customer event at iba in March, for example, where we presented our new procurement tool. So no, we’re not delivering to Swiss Post, for instance, but we’re becoming better at going for these types of tenders. Importantly, we now have everything in place to be able to immediately service these types of accounts from a process and logistics point of view.
OPI: Elsewhere in this issue of OPI Tom Schinkel talks about Amazon as the perennial bogeyman of our industry. The e-commerce giant doesn’t have a direct presence in Switzerland, but I presume it matters that it’s in countries surrounding Switzerland. How much of a factor is that?
CF: Well, it’s definitely a factor. Also, before I elaborate on that, Amazon in late April announced that it will launch Amazon Pantry in Switzerland soon. It’ll be purely a foodservice offering, but I will be monitoring it very closely. From a larger Migros perspective, the company owns the leading e-business food company in Switzerland which is called Le Shop, so Amazon potentially playing in that field is a very big deal for them, but they are well prepared.
I’m also keeping an eye on what’s happening with Amazon Business in Germany. But going back to your question, yes I’m absolutely certain that some of our small customers purchase from Amazon in Germany, France or Italy, especially if they’re located near the border of Switzerland and may have a post box where items can be delivered to.
OPI: Why do they do that? Is it price or convenience? If they deliver directly to Switzerland, delivery times are presumably longer.
CF: They would be, yes. Sometimes it’s price and sometimes it’s convenience. The smaller the customer, the more likely it is they will order from Amazon. We see the same at Office World: we have quite a lot of private customers and when they’re ordering office supplies, they’re also looking for other products while they’re there.
OPI: Why do you think Amazon has waited so long?
CF: I can only guess that the size of the Swiss market hasn’t made it interesting enough from a strategic point of view. Also, investment in the country is expensive. And lastly, we’ve got some excellent e-commerce players here already – partly from within the Migros group – so it would be a tough proposition for Amazon from the outset.
OPI: Before we finish up, let’s talk about EOSA. To start with, what is your role in the alliance now?
CF: I’m one of four board members of EOSA. The alliance overall is headed by Philip Becker from Dutch member Hedera who, as you know, followed in Peter Basci’s footsteps as Chairman when Peter retired. On the board, we are in charge of proposing EOSA’s strategy to all 11 members.
OPI: And what is that strategy? I know you had some member changes and added a Turkish member at the end of last year, but overall we don’t hear very much about EOSA…
CF: We are putting a lot of emphasis on developing our members’ portfolio of products. That is reflected in our preferred supplier programme which now comprises over 20 vendors. And we also for the past three years have had our a-Series private label range which is performing well for members.
The core remit of EOSA centres around purchasing, business development and best practice exchange. In the past few years we’ve improved the direct benefits significantly for our members due to our purchasing activities. Leaving BPGI in 2013 was an active step in our effort to do a better job with joint purchasing.
OPI: So you believe leaving BPGI was the right thing to do?
CF: Most definitely. BPGI membership was right for EOSA for a certain period. But there was far too much direction – I’d go as far as to say far too many demands – by the vendors. Rather than helping us, it was restricting us in what we could do in the market and that’s despite the fact that EOSA was actually BPGI’s largest member.
Every member of EOSA is different, in terms of product preference, in terms of e-commerce prowess, in terms of ‘typical’ customer. BPGI didn’t take any of that into consideration. Let me just say that it was a very complicated relationship and I’m glad we had the courage to step out of this network and develop our own purchasing identity!
OPI: But from what I can see there hasn’t been much movement in terms of members since I talked to Peter ten years ago. There’s also still the very noticeable gap of membership in the UK since office2office was acquired in 2007 as well as in the French market when the membership of Fiducial didn’t work out at all. And no presence in the Nordic countries either since the departure of Paperipalvelu in 2013.
CF: You are right in all of that. However, the alliance follows some membership rules, such as our members cannot be in strategic partnerships with competing globals. EOSA members now span 11 countries and have cumulative sales of €600 million ($662 million). We are more and more able to discuss and negotiate pan-European contracts with our suppliers. Another positive is that we are getting requests from companies to join the alliance, most recently – as you say – Akoffice in Turkey.
With regards to the UK, we’ve had some interest from potential UK partners although there’s now more of a wait-and-see attitude because of Brexit. We’re also re-evaluating a possible new partner in France.
OPI: How do you see the future of EOSA?
CF: I think it’s bright. We’re making great strides with our joint purchasing and our preferred supplier programme is very successful – more suppliers want to create international deals with us. For iba and Office World, EOSA is definitely a very good alliance to be part of.
OPI: That brings us back to iba and Office World. Any final thoughts?
CF: All I would add is that I have a great job, work with amazing people and that I believe we can be very successful.