Crisis talk



We hear it all the time. New product innovation is the lifeblood of the industry. And while this should ring true, there is concern that many vendors are falling well short.
Whether it be through lack of funds, lack of ambition or lack of vision, there is talk of crisis in an industry that has, over the years, been famed for its innovation.
Perhaps the mark of a truly innovative product is when its name becomes generic to the product range it represents. For example, people often refer to Post-its rather than repositionable notes, Pritt sticks rather than glue sticks, Scotch tape or Sellotape rather than sticky tape.
It is this sort of innovation that many believe is missing today. As Arno Alberty, director of international sales at Henkel Consumer Adhesives, says. "There is definitely a lack of innovation at the moment. All of us, not just at Henkel, are looking for a breakthrough in innovation, that next big thing."
There is an argument that innovation is difficult in a commoditised industry. Products are turned out fast and cheap and at volume. But Karl-Heinz Raue, international key account manager at writing instrument manufacturer Faber-Castell, insists that it is in such market conditions that innovation is more important than ever.
"It is especially commoditised markets that need innovation to maintain a profitable value and margin," he insists. "Without innovation, a given volume in a saturated market will lead to eroding prices and margins. Therefore quality brands must justify their existence and price-level with innovation."
A commoditised market brings about its challenges to the innovation process, but it need not be an obstacle. Horst Brinkmann, international marketing director at Stabilo, adds: "In a commoditised market you have to be faster. You have to do more of the old and you have to learn more of the new things. Sometimes you have to be more selective and sometimes you should be more open."


Comfort zone
There are a number of reasons why innovation may not be as commonplace as it perhaps should be. With the pressure on for quick profits, there can often be little incentive to focus on radical innovation. And in a tight employment market, the fear of failure can also be a factor.
Horst Bubenzer, VP of marketing at Durable, which generates 25 per cent of its turnover from products introduced in the past five years, agrees that there is a general lack of innovation in the OP industry at present, and even talks about a "crisis". But he claims it is not necessarily because it is a commoditised market, but more a traditional one.
"There is definitely not enough innovation in our OP industry today," he tells us. "We all live and act in a very traditional market with a lot of traditional products, so the tendency to focus on and invest into innovations is not well established."
As a result, he says, many companies are quite happy in their respective comfort zones, churning out what are basically the same products, year after year. Bubenzer even claims that many manufacturers are actually afraid of introducing new ideas and venturing away from the tried and tested formula.
He says: "A lot of companies not only think that new ideas are threatening, they do not even try to understand these ideas. They stick to their old positions and their old products. Of course, this improves productive efficiency and output … and old technologies also become more efficient. But in most cases this last increase is already a sign for the coming crisis."
And the crisis is unlikely to recede any time soon. Indeed, Alberty believes things will get worse. "There is a lack of commitment to innovation," he says. "Many companies are unwilling to invest because business is down and turnover and profits are decreasing. This will be the trend for the next two or three years.
"That makes it more important than ever to invest in innovation. I believe ultimately that it will be the most innovative companies that will be most successful. Generally speaking, however, things are getting worse."
Bubenzer adds that end-users are crying out for innovative new products. He remarks: "The right innovations fascinate dealers and consumers, they exceed expectations. They place brands in the hearts and minds of the end-user. More and more, consumers want innovative and well-designed products, products that also appeal to them emotionally.
"And that is also true for any commoditised market like the OP market. And a lot of prominent examples – from our DURACLIP clip folder to 3M’s Post-it – prove this."
The Post-it note is a fine example of innovation in the OP industry, and it is still going strong 25 years after it first appeared. A worry is, however, that there are scant few new ideas of this magnitude coming through today.
In fact, the constant criticism levelled at the OP industry in recent times is that there is a lack of any real, genuine new products coming through.
Raue understands the perception, but only agrees up to a point. He believes the innovation is out there, but does not always end up in the hands of the consumer, due to ineffective marketing. He comments: "There are a lot of innovative products already on the market – also in the office products industry – that consumers would love to buy and use. However, they are not aware of their existence and cannot find these products on the shelves or in the printed and electronic catalogues of the trade.
"I think we do have a lack of innovation marketing and distribution activities for innovative products," Raue adds.
Indeed, innovation is not always just about the product. Take the Dymo LabelWriter, for example. Is its success down to it being an innovative product, or a product innovatively marketed?
Esselte took the inventive step of advertising the Dymo LabelWriter to the end-user on prime time television with dramatic success, which ultimately led to Esselte being able to sell the unit to Newell Rubbermaid for a whopping $730 million, some $400 million more than venture capitalists JW Child forked out for the whole of Esselte just two years earlier.
Raue recognises this Dymo effect and says: "Definitely, the Dymo LabelWriter is a good example for innovation from the consumer’s point of view. It is offering a convenient solution for a real organisational problem by combining existing technologies. Since it is addressing obvious consumer needs it can easily be marketed."
Brinkman very much agrees with this. He says: "The challenge is not so much the number of new products, it is more how to win the battle in the consumer’s mind. If no one is able to differentiate your offer from the rest, no one understands the value of it which means everyone wants to get it for less."
And effective marketing has a vital role to play. "In my view, marketing means to put the consumer in the middle of the company. After understanding the demands and translating them into possible solutions, a clear communication is needed to let possible consumers understand how the particular offer can help them."
This is not always so easy, however, and time to market can prove to be a major obstacle. Says Alberty: "Sometimes it will take two or three years for the message to get through to the end-user, the office worker. We don’t all have these massive TV advertising budgets, so most of us cannot afford to invest in print and TV campaigns so we need to do sampling, and have to use catalogues and listings to get this jobs done. But it does take, in my experience, two or three years to get the end-user informed."


Innovation often means different things to different people, and is a term that is often used lightly. For Raue it is all about giving additional value to the consumer, whether that be through functionality, or tapping into the emotional appeal of the product, ie the design.
As an example he, perhaps not surprisingly, points to Faber-Castell’s GRIP 2001 pencil, with its ergonomic dots. He adds: "There are many more examples, even in the market of ordinary pens – mechanical pencils with leads that do not break, roller pens with fast drying ink suitable also for left-handers, markers with ink that does not fade in the sun, etc.
"I am also sure that other categories such as desk accessories, labels or adhesives are full of interesting innovative but unknown products."
Raue points out that the only way for manufacturers to stay ahead in a competitive environment is to innovate. "Innovation is most of all driven by the competition," he says, "because no strong brand can maintain its position forever without innovation. The innovative solutions are often created by a smart combination of consumers’ needs and wishes with the skills of a manufacturer."
Bubenzer develops this point and insists that a successful innovation process is a three-way partnership between the vendor, the reseller and the end-user. He says: "They are all sitting in the driving seat. The consumer is our objective, our market, our business. His need to improve working processes, to save time, to enhance the communication and such should always be the starting points of the innovation process.
"The manufacturer faces the highest hurdle because he has to make it happen. Only companies that permanently and courageously invest into research and development with the result of yearly product news will succeed. Innovations are complex, sometimes strange and not easy to understand. They often meet with disapproval, because in all of us there is a basic fear of change."
And finally, not forgetting the reseller, Bubenzer adds: "To achieve the involvement of dealers we have to communicate with them. Before you start to actually sell the new product you have to establish a relationship with the innovation, to finally achieve trust."


Durable was recognised as the most innovative company of the year at OPI‘s European Office Products Awards this year. So correspondingly, Bubenzer’s thoughts on the innovative process should be listened to. He believes that there are four factors which result in real product innovation – quality, functionality, the USP and design, although quality, perhaps, is not as important as it should be.
He explains: "Quality has lost part of its former power and importance. Quality today is more the price to enter the market than a competitive advantage.
"Functionality is the back bone of real product innovation because it delivers the benefits to the consumer. If you look for instance at the Durable key management system, you have vital proof that we reinvented the handling and organisation of keys.
The final ingredient, according to Bubenzer, and arguably the most important in today’s crowded marketplace, is its vital point of difference, or USP. "The USP," he says, "is often hidden in the functionality aspects and reveals a certain uniqueness in comparison to the competitive products in the market.
"Design is appearance, feeling, taste, smell and colour of a product, for example, it strongly delivers the emotional aspect. In times where me-too products dominate our market, design more and more becomes the competitive advantage."
And this point of difference is vital, particularly when considering the threat presented by the rise of private label products and also the cheap products increasingly coming from Asia.
Alberty says: "It is important for manufacturers to stay ahead of private label, and to always have a high-entrance barrier to the copiers from Asia, to make it more difficult for them to copy instantly."
Indeed, Alberty has a stark warning for manufacturers that continue to ignore the importance of innovation. "If you do not innovate, you will die."


If It Ain’t Broke…


Arguably the greatest innovation that the stationery industry has ever seen is the original biro – the Bic ballpoint pen.
When the Bic ballpoint pen first arrived on the market 55 years ago, created by Hungarian inventor Ladislao Biro, probably few at the time understood just how successful it would go on to be.
And while the Bic range has changed over the years, the humble ballpoint pen essentially remains the same. Incredibly, the French manufacturer sold its 100 billionth Bic biro recently. That translates into five million sold ever day, or 57 a second.
An even earlier OP innovation still with us today is the file folder. The original file folder was invented by Globe-Weis in the late 1800s and the size spec has never changed.
Great innovations need not the complicated. 3M’s humble Post-it note, which was first introduced 25 years ago, is frequently held up as a great example of office products innovation at its best. Just as the biro has become a generic term embedded into the public conscience, so has the Post-it.
While basically the same product, the Post-it note has now expanded to be available in eight standard sizes, 25 shapes and 62 colours.


Quest for Invention


Staples takes a novel approach to seeking out new innovative products for its 1,000+ range of own-branded products, by holding an annual Invention Quest competition.
Last year four ideas were made into products to appear in Staples stores, with one of them – the WordLock – going on to be the best selling in its category.
In a press release, Staples says it "is continuously searching for innovative office products to add to its growing line of Staples brand products."
Unfortunately, due to "competitive reasons", Staples declined an interview request to share its thoughts on innovation in the OP space.