In one of his first interviews as CEO of Spicers, Rob Vale talks exclusively to OPI+ about the excitement over his new job, his role in the industry and the challenges ahead…
OPI+: You’ve been in the Spicers CEO seat for a couple of months now. How has it all been going?
Rob Vale (RV): I took over from Bill Armstrong on 13 February, so have spent the last couple of months trying to really understand the business and the expectations of what makes a top quality wholesaler. It’s great to meet the customers – they’re a great bunch of people and everyone has been terrific in sharing knowledge about their business and how it works. There’s a lot of enthusiasm and ambition out there.
OPI+: Last week you addressed dealers at the Interactive Products user conference at your first major public address in the industry as Spicers CEO. As you get to know your dealer customers, what is your impression of wholesaler priorities?
RV: As a wholesaler we must be an effective partner to our resellers to help them with their logistics and marketing. This is where Spicers has enormous experience and strength. We help them to remove costs from the supply chain and provide them with an outstanding service so that they in turn can provide their customers with an outstanding service.
OPI+: Ron Wotherspoon has described it as "the age of the wholesaler" in the UK. Do you agree with this?
RV: What dealers want is a true partnership with their wholesaler. That’s because the dealer relies so heavily on the wholesaler. Spicers works closely with its dealer customers and understands what their business priorities are. So the wholesaler is now a critical part of the dealer organisation, because many dealers don’t want to be investing in huge amounts of stock.
Spicers has a lot of product very close to its dealer customers, so why would dealers want to go out and invest in all that stock themselves when we’ve got it available close to them and with very high levels of service? This enables the dealer to free up cash and focus their efforts on selling to their customers. They’re in a brilliant position to provide a high level of service using our logistics.
OPI+: Do you believe that the role of the wholesaler has changed?
RV: I’m not sure that the role of the wholesaler has really changed. I guess like every other part of the business it has evolved to meet the needs of the individual customers, and indeed the prevailing business circumstances. Clearly, the margins that are available in the supply chain are under pressure so in that sense wholesalers have to become that much more efficient in moving products through the supply chain at very low cost and with very high service levels. That’s necessary to meet the expectations of both the dealer and the end consumer. So, basically, I would say it is getting tougher, margins are under pressure and service expectations are growing, but aren’t they doing just that everywhere else?
OPI+: Dealers have significant advantages over national players. Please describe the advantages – and do you believe dealers are making the most of them?
RV: Dealers that use Spicers have some terrific advantages in terms of how they run their businesses. For example, they’re often close to the customer locally, so can provide a highly personalised level of service. In addition, they can deliver urgent orders at short notice using Spicers’ logistics systems. On top of that, they have access to a full range of products, all held in stock close to the customer. These are important advantages.
It’s a danger for everybody that sometimes we don’t realise the advantages we have. Clearly there are many dealers out there that have been extremely successful because they have understood what they are good at, and they’re not shy in bringing that to the attention of their customers. It’s great to see just how ambitious so many of our dealer customers are.
OPI+: How do you believe that many dealers could improve their position?
RV: Freeing up cash is very important – if dealers have got a warehouse full of office products then the number of stock turns they are getting on that can be very low. I think it’s a real trap to think that dealers can improve their margins by a few percentage points by stocking more and more products from more and more manufacturers. That may be true of their gross margins, but it is unlikely to help their net margins.
Frankly this strategy amounts to nothing – we’re in a much better position to supply them with the logistics they need so they can focus on selling and providing outstanding service to customers. The more successful dealers are realising this and de-stock. They don’t want to fill their warehouses with commodity office products. They want to keep the stuff close to the customer that is acutely important to the customer, such as print or customer-specific products. We can take care of the day-to-day office products and deliver them to the dealer – or even direct to the consumer – accurately, on time, and at the right price.
If you’re a huge organisation with the money and facilities to stock a comprehensive product range then that’s fine, but if you’re not, then to try and have the full range of products in your warehouse will mean that the velocity of the SKUs in your warehouse will be low. You are unlikely to make money with that model. Dealer needs to focus on keeping only the products that are crucially important to their customer in the warehouse, not commodity office products.
OPI+: How do you plan to help Spicers realise its potential? Where do you see the company in five years’ time?
RV: I think everyone knows that Spicers is a business with a terrific history. But we also have a great future. There is plenty of opportunity to grow and expand our business around Europe.
Even in the mature UK market, there is a lot more that we can do. Plenty of dealers are aware of how we can help them grow both the bottom and top line. But there are others that haven’t quite woken up yet to what Spicers can offer them, and how we can work with them to help their business succeed. More selling is required!