It’s been nearly a year since Essendant Inc., which relies heavily on ecommerce as a distributor to thousands of resellers, was acquired by Sycamore Partners, a private equity firm that also owns Staples Inc. It’s proved to be a positive change, Essendant president Harry Dochelli said in a recent interview.
“I’m highly encouraged by our new relationship with Sycamore and Staples,” he said. “It gives us a much stronger financial position we haven’t had as a stand-alone company, and going forward we’re capturing the synergy of companies under the umbrella of Sycamore Partners. It gives us a much better position in the market.”
Those synergies range from sharing supply chains and sourcing goods more efficiently to using more digital commerce tools to help resellers interact with their customers in more personalized and efficient ways. These developments follow Essendant’s divestiture in October of its industrial products division, which handled automotive, safety and industrial supplies through ORS Nasco, Medco and Nestor. Essendant sold these units to One Equity Partners.
Targeting a 98% next-day order fulfillment rate
The shift away from industrial products now has Essendant, formerly known as United Stationers, focusing more on—and expanding—its core markets of office supplies and janitorial/sanitation, or JanSan, products. As a top-tier distributor with thousands of channel partners—distributors, wholesalers and dealers, often referred to overall as “resellers”—Essendant works in several ways to help these companies better operate with ecommerce, enterprise resource planning and other business software systems.
As a private company, Essendant no longer reports financial numbers. In its last full-year financial statement as a public company prior to the acquisition by Sycamore, for the year ended Dec. 31, 2017, it reported net sales of $5.04 billion; in its last quarterly statement, for the third quarter ended Sept. 30, 2018, it reported net sales of $1.29 billion.
Among the specific improvements Essendant is focusing on for resellers in its association with Staples:
- A 98% next-day order fulfillment rate; marketing automation; website content and ecommerce features personalized for end-customers;
- Entry into new product categories and services, including managed print services and personalized promotional products;
- Expansion of existing product categories, introducing more pack-and-ship materials, food-and-beverage products, technology accessories, school supplies, medical supplies, personal computers and mobile accessories.
An overall goal of Essendant’s strategy, Dochelli said, is to help all of its resellers stand out in the market, regardless of their size. “We try to level the playing field, providing each reseller with content of the same quality,” he said. Its clients range from small, regional dealers to large national distributors and retailers.
Essendant and Staples have several other offerings underway or in the works.
Promotional products and print services
Promotional business products are in demand by companies looking for a way to spread their brand and logo on everything ranging from pens and backpacks to polo shirts and winter jackets, but the industry that supplies such products is fragmented, making it a challenge to deal with multiple vendors, Dochelli said. But Essendant is now piloting an approach for resellers to have direct access to one of the few multi-category suppliers of such products in Staples Promotional Products. “We’ll provide our customers with one convenient way to transact on promotional products,” he said.
Earlier this year, Staples acquired DEX Imaging, a provider of managed print services, including the hardware and software for printers, copiers and related office machines, plus services to keep them stocked with supplies and operating. With built-in software for monitoring and re-ordering supplies, the machines forward re-order notices to DEX, which will forward the orders to Essendant and its resellers for delivery.
Essendant is also building out the ways that resellers can interact digitally with Essendant as well as with their customers.
For example, resellers can visit Essendant’s Biggestbook.com to learn how they can enhance their own websites and improve their user experience. Through this platform, resellers can search Essendant’s 40,000 business products in office supplies, JanSan and other categories for product specifications, pricing and such things as safety data sheets that cover requirements regarding how certain products must be handled.”
More SKUs and DCs
Essendant’s toolkit for resellers includes site search technology and web analytics that many resellers use on their own ecommerce sites. Essendant also helps resellers deploy product content and such features as product recommendations, cross-selling and upselling displays.
And its resellers will have more products to consider selling and additional ways to fulfill orders for them. Essendant will add thousands of additional SKUs through Staples to the company’s total, about doubling its number of office products. Essendant will also add dozens of Staples’ distribution centers to the company’s current network.
This enlarged network of distribution centers will expand Essendant’s long-running Automated Distribution Order Transfer system through a new project entitled Market ADOT.
As Essendant receives orders from resellers, Market ADOT will route each order to the primary Essendant warehouse serving a customer’s area with the highest level of service; if that primary warehouse is out of stock of the ordered products, Market ADOT will automatically forward it to the next-best warehouse based on available service. With the Staples network of distribution centers added to the mix, Essendant now has an extra layer of back-up warehouses that it may add to the ADOT system. “We’re targeting the third quarter of next year to do a pilot,” Dochelli said.
Focusing on office products and JanSan
For its channel partners involved with office products, Dochelli said, Essendant works with software vendors including ECI Software Solutions and BMI Software to deploy ecommerce, ERP and other business software, helping its channel partners better operate their businesses as they sell online to their end-customers.
For Essendant’s channel partners involved with JanSan products, it works with vendors including J&M Technologies to deploy ecommerce, ERP and product data management systems.
“We also work with channel partners’ proprietary systems,” Dochelli said. “We procure a technology package and make SaaS tools available to all resellers, and we’re able to spread the investment across a larger number of resellers.” (SaaS, or software-as-a-service, technology makes internet-hosted ecommerce and other types of applications available to users through subscriptions via web browsers.)
Getting personal with end-customers
Earlier this fall, Essendant launched two digital commerce and marketing tools, Email Sales Pro and Personalized Marketing Zones, the first applications the company is introducing as part of a new ecommerce software suite.
Email Sales Pro uses a reseller’s point-of-sale data, including customer information, and analytics software to automatically deliver personalized email messages tied to customer’s purchasing behavior.
The Personalized Marketing Zones technology was designed to let resellers display online product recommendations based on what a reseller currently has available to ship as well as on what an individual buyer has shown interest in through online activity. “The system will continually learn shopper preferences to increase content relevancy, customer engagement and sales conversions the more the program is used,” Essendant says.
“We know end-buyers are more likely to purchase from a company that offers personalized online shopping experiences,” Dochelli said when Essendant launched the tools. With these solutions, resellers can lean on Essendant’s digital marketing experts to implement and manage ecommerce innovations, and ultimately, increase their revenue at a fraction of the overhead cost.”
Making all that work with thousands of resellers may be a tall order, but it’s an endeavor Dochelli says Essendant will focus on as core to its success. “We need to keep our resellers competitive,” he says. “We only succeed if they succeed.”
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