OPI: How autonomous or indeed centralised are the various Office Depot Europe locations?
Neil Maslen: Broadly speaking, we want to seek the benefits of centralisation where it makes sense, but we also recognise that our customers sit in localities. The contract channel, for example, is managed and executed very much at a local level, because languages vary, customers are based locally and product requirements are often country-specific.
From a Viking perspective, there are components that can be managed and executed centrally.
The way we work also depends on the location. Our so-called growth countries — Spain, Italy, Sweden and Central and Eastern Europe — are operated on an absolute local basis, with full entrepreneurial ownership of the P&L and delivery across the direct and contract channel. In the case of Sweden that includes retail as well.
We have a special situation in France because we faced some challenges there and it needed additional focus. We took a decision at the beginning of last year to apply the mindset of a growth country in that region and make it more autonomous and much more independent from the rest. I believe in some countries you need to shorten the route between the decision-maker and the customer and that’s what we’ve done in France where we have a retail, contract and direct presence, contract being the dominant part with about 50%, followed by retail and then the direct business.
OPI: You talked earlier about putting the customer back at the centre of what you do. How do you do that?
NM: By understanding the customer — existing and potential. Like I said before, any business and the people within that business are not just customers as an organisation but also as individuals.
And by offering a complete omnichannel experience. We have two great brands and through Viking we’ve been a leader from an e-commerce perspective for many years. This will also will help us in our endeavour to become one entity in the customers’ minds. They now have the opportunity to interact with us in multiple ways across the two brands. They can work with us in a contract-service-people-orientated solution or through an easy, hassle-free, online solution. In the countries where we do retail there are further bricks-and-mortar solutions.
It goes back to becoming experts in what we do. And ‘online first’ is very much part of that offering. Digital partnerships that maximise productivity have to be at the core of everything we do — how we market, how we promote, how we approach our customer base — it’s all about leveraging digitisation.
One small example of this is our Vital Communications business, effectively our managed print services offering. But it’s not just about managing the print; the real value comes from the overall supply chain perspective and the fact that we can offer a digital solution for anything under the broad ‘print’ umbrella — whether it’s a marketing pamphlet, a business card, a company-wide launch of information, turnkey solutions for specific customers, and so on.
OPI: With the growth and growth of Amazon in the online space, do you absolutely need that omnichannel differentiator you’re referring to?
NM: Well, a breadth of services and options creates value and that’s as true for retail — Office Depot knows all about the challenges of retail in the US as you’re well aware — as it is for online. If you operate in a pure online environment, your number one challenge is always going to be the price point and in any market that Amazon enters, that’s an area where it will be very difficult to beat.
Online-only players have to go back to some of those concepts that we were talking about earlier which is moving into products that are on a growth trajectory. That’s something we’re incorporating into our Viking strategy going forward.
So yes, I’m glad that we have the ability to offer more than just online, but it’s definitely ‘online first’ — digitisation is not just about how a customer interacts, it’s also about the type of service that you are able to provide.
The omnichannel differentiator offers a further benefit; within our contract business we have a well-established ability to offer customised solutions backed by experts who seek opportunities for the customer to improve their workplace solution. We will integrate this strength into our online first solution — bringing the best of both to customers.
OPI: You mentioned the considerable investment by Aurelius before. Where are these €20 million going to go?
NM: It spans both back and front end. The back end is about efficiency, the tools that you deploy to be more effective, including CRM, management of the warehouse, financial systems — things that affect and benefit the total business.
Then, on the front end we are launching a new e-commerce platform for both Office Depot and Viking which has already been rolled out in a number of countries. That’s all about the customer experience.
OPI: Finally, what are your views on the European OP industry as a whole?
NM: I have three observations. The way people work is changing. We see this most acutely in our core offering, which is paper, ink and toner. That’s a challenge that’s shared in every country across pretty much any geography.
The second challenge is to identify the right products and services that will enable us to return to growth by exchanging them or adding them on to the products that are in decline — like I said before, we very much believe in ‘the power of AND’. Again, that’s not specific to a unique geography.
The third challenge is the ability to gain market share. That is definitely impacted by the overall robustness of the market that you’re operating in. And here we have vast differences across the various European markets.