Leaders Forum: NXP

INCLEAN chats to Joe Taylor, CEO of NXP.

How was 2019 for NXP? What were the highlights? What were the challenges?

2019 was extremely rewarding for NXP. We built our new company following the split from Staples and Office Max. We increased our staff numbers by over 50 per cent, launched our new brand and built our new head office functions in Auckland across supply chain, finance, IT and sales.

We added over 2000 new SKUs to our DCs in Auckland, Wellington and Christchurch, largely across the cleaning, hospitality and kitchen categories.

I’m especially grateful to the many customers that re-signed with NXP during this transitional phase and our team who worked hard to deliver record service levels in supply chain and sales.

What will be the immediate focus for NXP in 2020?

Our focus will shift externally. In 2018 we sold the company. In 2019 we built the company. And in 2020 we will grow the company.

We have shifted our focus to proactively helping our customers take care of business. During January we re-organised our go to market teams. We’ve restructured the business to have our category and sales teams consolidated into divisions focused heavily on the customer.

Our new Cleaning, Care and Hospitality division is over one third of our business, and our facilities and kitchen categories now provide half of our revenues.

Innovation around the customer experience will always be a priority for us. We will soon launch, specifically for the BSC market, new services such as click and collect and same day delivery. We know flexibility of ordering is important for our customers.

Our NXPortal (previously known as NetXpress) will provide recommendations to customers for cost effective alternatives helping them save money during the buying process.

In March NXP will launch a new offering, the NXP Advisory Service. This will give NZ businesses direct online access to a procurement portal containing their unique purchasing information.

In the reporting suite the customer will see trends, ranking and insights enabling them to make improved purchasing decisions and see who is buying what in their businesses.

What do you see as major opportunities for NXP in 2020? What challenges do you expect to face?

Our challenge will be building NXP brand awareness. This year marks the 70th anniversary for NXP, we are a proud kiwi business, but our new name is relatively unknown.

We differentiate ourselves in the market by building bespoke procurement solutions for NZ businesses, whilst providing seamless end to end online and last mile customer experiences for ordering.

Given we have had so many name changes in recent years, Corporate Express, Staples, Winc, and now NXP, we have work to do to remind the market who we are and what we stand for.

How have the buying habits of customers altered over the past year?

Every category seems to have been disrupted by someone, somewhere.

Five years ago, USB sticks were one of the fastest selling SKUs. They are now one of the slowest selling items, disrupted by cloud storage.

We still see a lot of confusion in the cleaning and BSC sector around the best systems and processes – contradictory offerings such as the most appropriate solution between microfibre and chemicals are a good example of this.

The consistent theme from customers continues to be online sales and vendor consolidation, an example of this in B2C is the Warehouse Group’s new offering, TheMarket. NXP’s online revenue climbed to over 90 per cent+ last year. We are uniquely placed in NZ to be the Amazon for business with over 30,000 SKUs already online and growing.

Did you notice any trends in 2019? Do you expect those to continue?

Sustainable sourcing, CSR programs and environmentally friendly products are a huge trend coming out of 2019 and are here to stay.

The 2018 change to China’s recycling import policy was a real game changer in NZ; it shook the market and is what was needed to drive a desire to buy better and minimise waste.

Another crucial shock has been the broader outcomes sustainable sourcing program for Government, led by MBIE, which heavily focuses on waste reduction, NZ ownership and recycling.

In 2020 NXP is launching our new line of sustainable products under the name NXPlanet. We already have hundreds of SKUs in the range and have implemented new sourcing programs designed to help NZ businesses procure more sustainably.

Are there any international trends that you think will make their way to NZ in 2020?

There are two trends out of the US that are really starting to make an impact in NZ.

The first is transparency and use of data. Organisations like www.puremarket.com are giving consumers insights into exactly what products are made from, where they are sourced and how they are made – Kiwi’s increasingly want to know how their purchases contribute to the local economy.

Workplace hygiene is also back on the agenda. Post GFC, and for the last decade, in a bid to reduce operating expenditure many businesses slashed workplace cleaning budgets.

As NZ unemployment remains low, staff engagement is an important competitive advantage for businesses, ensuring a great place to work that is germ free and clean is an important element of this conversation.

How do you see the cleaning landscape evolving into 2020?

Smarter, not harder. Facilities management and cleaning companies are spending more time understanding how product selection and the buying process can either reduce labour or improve productivity.

For most cleaning organisations 90 per cent of their variable cost is labour. The trend of trying to save cents on the dollar on poor-quality product at the cost of labour is diminishing every day.

Is there one key message that you would like to share with the industry?

There have been conversations in the larger market regarding the de-bundling of cleaning labour and cleaning products. NXP is not entertaining this conversation and plans to continue to support the BSC market by providing a single source solution for all your product sourcing needs. We will continue to put our customers’ needs first, always.

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