Its name suggests a narrow focus on office supplies, but United Stationers Inc. is far more than a wholesale distributor of copy paper, notebooks, pens and staplers. The $5 billion-plus company also supplies janitorial and breakroom supplies, provides industrial equipment to the welding, oil field and building construction industries, and has a major—and increasing—focus on helping thousands of resellers sell online to their business end-customers.
Net sales for the quarter ended Sept. 30 increased 6.2%, to $1.420 billion from $1.337 billion a year earlier, and one of the most rapid areas of growth was in sales to its growing based of online resellers. “We are particularly pleased to see strong momentum in online sales, which were up almost 20%,” Cody Phipps, president and CEO, said in a third-quarter conference call with stock analysts last month.
Contributing to United Stationers’ success in e-commerce is an aggressive strategy of building out an infrastructure, and in-house expertise, that supports a shift to online sales. In June, the company acquired CPO Commerce, an online merchant of power tools and other industrial supplies with a network of 41 e-commerce sites that sell to both businesses and consumers. The third quarter marked CPO’s first full quarter as part of United Stationers, and the new unit didn’t disappoint with its contribution to its new parent’s total sales. CPO “continued its double-digit growth pace, adding $21.9 million in sales to our top line,” chief financial officer Todd Shelton said during the conference call.
United Stationers has said the CPO acquisition was part of a plan to build the corporation’s presence and expertise in e-commerce, but it wasn’t the first major step in that effort. A year ago, it hired as its new corporate head of digital operations Girisha Chandraraj, a veteran e-commerce executive who honed his skills since the 1990’s at retail consultancy Kurt Salmon and, most recently, Dick Blick Art Materials.
In a recent interview at the United Stationers headquarters in the Chicago suburb of Deerfield, IL, Chandraraj explained how he oversees teams set up to help the company’s clients—including major retailers like Target Corp. and some 25,000 independent resellers—improve how they sell United Stationers’ products online. For a client like Target, it provides digital content about office supplies and other consumer-oriented products that the retailer can present on its e-commerce site. And it provides many of its thousands of resellers e-commerce technology and expertise for developing their e-commerce sites. “We provide full technology and services capabilities,” Chandraraj said, noting that he can pull from a corporate crew more than 100 I.T. experts.
One reseller that United Stationers recently helped to relaunch an e-commerce site is Consumers Interstate Corp., which consolidated three niche e-commerce sites for business supplies into the new SupplyTime.com.
By helping resellers sell better online, United Stationers figures it can attract more resellers as wholesale customers while also increasing their efficiency as sellers and revenue. “There are thousands more we could do business with,” Chandraraj said. “We’re trying to be a more effective wholesaler.”
The company will also consider improving its own wholesale e-commerce sites, though it hasn’t openly specified how. In addition to the e-commerce sites operated by CPO Commerce, which sells to both business and consumers and is No. 256 in the 2014 Internet Retailer Top 500, which ranks companies by the annual web sales, United Stationers also operates several of its own wholesale e-commerce sites for selling to resellers: Azerty.com for office supplies, furniture and related products (and Azerty.com.mx in Mexico); ORSNasco.com for welding, oil field and construction industry products; and LagasseSweet.com for janitorial, food-service and related supplies.
Chandraraj doesn’t minimize the difficulty in going digital. “It’s not that simple,” he said at a forum on e-business last week hosted by Forrester Research Inc. Among other things, he advised that companies get direct involvement by and support from senior management early on in e-commerce projects, and to make digital strategies a part of the sales, marketing and I.T. departments. “The first failure is to compartmentalize digital,” he said.
In the company’s conference call with analysts, CEO Phipps said he looked forward to continued improvements in sales and operations stemming from the company’s digital business strategy.
“Last year, we hired talent to build online services and digital capabilities for customers, expand our digital content and enhance our syndication and content delivery services,” he said. “These efforts are clearly having an impact on our results, as our sales to online customers have accelerated, growing nearly 20% during the third quarter. We expect continued growth as we implement the next wave of digital capabilities with these customers.”
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