Essendant, a national wholesale distributor that provides access to a broad assortment of products, including janitorial and breakroom supplies, foodservice, technology products, traditional office products, cut sheet paper products, and office furniture, was acquired last year by Sycamore Partners, a private equity firm that also owns Staples. We sat down with Harry Dochelli, President of Essendant to learn more.
What does the acquisition of Essendant by Sycamore Partners mean for the company?
Since Sycamore Partners also owns Staples, we plan to collaborate with Staples in the future, while remaining a separate company with a separate board of directors. What Essendant leverages under the Sycamore umbrella with Staples is shared services activities, such as buying together, supply chain efficiencies, and other synergies wherever possible; but Staples and Essendant will remain two separate companies.
We also operate within a firewall whereby we have established a set of administrative, digital, and physical barriers to ensure the data of our customers is safeguarded. Only certain associates at Staples, “firewalled” personnel, are permitted to have access and it is limited to what is needed to perform their job function.
What is Essendant’s role in the JanSan industry?
We view our role as broader than other wholesalers in the industry, as we are not only a distributor of products. Typically, in the JanSan space, distributors are either fill-in for inventory or they provide the tail-end products to customers—that’s the typical JanSan wholesaler. We go beyond that by providing both technology capabilities and marketing capabilities to our JanSan distributors.
Essendant helps our JanSan distributors become more relevant as a webstore—typically, in the JanSan industry, companies are a little bit behind from a technology standpoint. In most cases, they still have sales reps taking orders personally, while the world is quickly going digital and moving beyond that method. What Essendant does is help these companies get into this digital space by providing technology services and content.
Furthermore, I think many of our JanSan distributors don’t know where to go to get content for their websites, so we are the folks that provide that for them. We syndicate content on over 40,000 items to our distributors in order to populate their websites.
In the marketing arena, we also provide capabilities to our distributors that are different than everybody else. For example, we have tools that we provide to our distributors that will allow them to market to their customer on their website and capture upsell and cross-sell opportunities. We have an email program that provides a robust email platform, as well as professionally designed emails that distributors can send to their email list and drive traffic to their website.
Beyond digital, we also offer traditional marketing tools like catalogs. All marketing that we develop is designed to allow the distributor to easily integrate their brand.
When you refer to Essendant providing website content, do you mean product details, or other marketing content?
I am referring to product content. Creating content online for each product you sell can be expensive and difficult to produce. Having thorough content that tells the complete product story is essential so that the buyer has the information they need to make the purchase and not leave a website.
This is also where synergies with Sycamore come into play underneath this umbrella with Staples—Staples and Essendant both have the ability to create content for resellers. Now we are looking at how to create content together. This is an area where Staples excels, as they’ve got more rich content, such as videos and pictures, which provides an opportunity for Essendant to leverage these capabilities. We are just starting to populate our content with the feeds from Staples content, and then getting it to our resellers so that they have it on their websites.
Would you say that web content will be a major focus for Essendant on the horizon in its collaboration with Staples?
Without a doubt, yes. We are invested in looking at new enhancements to the technology offerings that we have, and web content would be a part of that, as well as smarter marketing that uses buyer browsing and buying history to deliver more targeted marketing . We are looking to leverage this larger portfolio of companies and then make more technology offerings available to our independent distributors in a way that would never have been possible for them to do on their own.
We are also looking at our distribution network and seeing how we can optimize it in this new collaboration with Staples. So, for example, if a customer places an order with us today and we don’t have that product at the nearest warehouse available, we would overnight it from a nearby warehouse and get it to the customer as soon as possible. In the future, we will be able to have our warehouses talk to the Staples warehouses so that they can fulfill an order for us when we are not able to. That would raise our next-day fill rates up to potentially 98 percent from its current 90 percent.
This definitely opens up the opportunity to talk ESP and PMZ but it may be too much too soon. Maybe we just expand on the personalization concept. For instance instead of saying “personalization” perhaps we say “smarter marketing that uses buyer browsing and buying history to deliver more targeted marketing.”