I enjoy writing about trends. Attending dozens of industry events and interviewing thought leaders from all segments of the industry, I hear about trends all the time. It’s an exciting time in the office imaging industry with so many trends emerging and not all are limited to hardware, solutions, and services. Some are cultural shifts, others represent a paring down of the industry.
With that in mind let’s look at six trends, some making an impact now, and others that will have an impact going forward, and explore what they mean to Office Technology Dealers.
Acquisitions in the Office Imaging Channel
Acquisitions are a weekly occurrence, many fueled by private equity. And those are just the acquisitions that are being reported. Some fly under the radar. In The Cannata Report’s 33rd Annual Survey in 2018, 21% of dealers (70) in the universe of 338 respondents made an acquisition in the previous year. When asked if they had plans to acquire in the coming year (2019), 66% of respondents reported they did, a 16% increase over the previous year. This uptick can be attributed to a combination of following the leaders (those big dealers who are acquiring like crazy) and a fight for survival, by acquiring IT companies, telecom/phone systems companies, mailing companies, and others to expand the dealership’s product and services offerings to remain competitive and offset declining print volumes.
Dealers are also expanding their regional footprints with acquisitions. Dealers such as Centric Business Systems, Marco, Impact Networking, FlexPrint, or even the recently acquired DEX Imaging Systems, have become more regional in scope.
What Does this Mean to Office Equipment Dealers?
Depending on the market, we expect Office Equipment Dealers who remain in the business will see less competition from smaller dealers and more from private equity backed dealers and larger who are expanding their regional footprints through acquisition. Meanwhile, those dealers who haven’t thought about selling, and even those with no intention of selling, should prepare themselves for when private equity funded dealers and the big dealers come knocking. Dealers don’t need a “For Sale” sign on their door to attract buyers. For example, of the dozen or so dealers acquired by Flex Technology Group in the past 18 months, only two of those dealerships were being shopped around.
Forget imaging, data is the new buzz word. During our visit to Japan last year, Konica Minolta told us it considers itself a “data company” rather than a copier company. All the major OEMs are focusing on data and introducing new ways of managing it in its many shapes and forms, even if one of the conduits for dealing with that data is still the MFP.
What Impact does the Data Revolution Have on Office Equipment Dealers?
If data is the lifeblood of virtually every organization, that spells huge opportunities for Office Technology Dealers who can turn to the latest offerings and resources from their OEMs, and solutions and services providers to help their customers better manage their data. Maybe it’s a new MFP that can connect that data to a cloud service, an ECM program, a mobile app, or a smart office system that allows for easier access to data.
HP is talking about it, Konica Minolta is talking about it, and NEXERA just released an imaging device as a service (iDaaS) solution. DaaS combines hardware leasing and end-to-end lifecycle services into a single, per-device, monthly contract, or subscription if you will. It includes full asset management, managed services, and technology updates. Based on that definition, one might say it isn’t a completely radical change from some of the bundled contracts that dealers offer today.
What Should Office Equipment Dealers know About DaaS?
This appears to be the model of the future for hardware placements as well as certain solutions and services. There’s something to be said about a recurring subscription, especially as more people have become accustomed to paying monthly or yearly subscriptions in their personal lives for such things as software, music, and entertainment. Do you think they’ll think twice about doing this in contracts with their technology suppliers?
It’s not just millennials, it’s Gen Z and Gen whatever too. Whether these generations are on the customer side or working in a dealership, it’s not the Baby Boomer generation anymore even though that’s still the generation that describes many dealer owners. Here we’re talking about different work habits, different buying habits, and different attitudes towards work and life.
What Does this Mean to Office Equipment Dealers?
This is a cultural shift and within a few years, these younger generations will have taken over the industry. It’s time to embrace and adapt to this new generation of workers and a new generation of decision makers because millennials, Gen Z, etc. are taking over and the clock is ticking on the Baby Boomer generation.
Diversification of Offerings Like MPS and Managed IT
MPS and Managed IT are two prominent examples of diversification. But there are many more ways a dealer can diversify. We’ve seen digital signage, production and industrial print, security and cybersecurity, and smart office solutions, as well as other opportunities driven by robotics, data, and artificial intelligence that will eventually be added to a dealer’s menu of services.
What Do Office Equipment Dealers Need to Know about Diversifying their Offerings?
Dealers can’t afford to survive off the status quo—printed output—if they want to be a relevant force in the future. In our view, diversification is an opportunity limited by the creativity of the dealer and his or her willingness to take on new technologies, solutions, and services, and an exciting one at that.
More Managed IT Services
With dealers and manufacturers acquiring managed IT services companies, as well as the growth of third-party organizations providing managed IT services to the dealer community, more dealers will offer this service. Like it or not, it fits well with their current product offerings. And if a dealer isn’t equipped to handle this on their own, there are plenty of partnering opportunities available.
What Do Office Equipment Dealers Need to Know About Getting into Managed IT?
The time is right for dealers to rebrand their business. Just look at Marco. As its CEO Jeff Gau says, “We’re an IT company that also sells copiers.” For more dealers, positioning themselves as an IT company that also sells copiers will eventually be the rule of the future rather than the exception.
Security Sensibility Applies to the Office Imaging Channel, Too
With an increasing number of cyberthreats, as well as physical threats within the workplace and in the public sphere, security might easily be considered one of today’s hottest trends. HP has done an excellent job of drawing attention to cybersecurity threats with its “Wolf” videos, while every other OEM is placing security front and center. It’s a key element of most new product introductions and a focus of many companies’ R&D efforts. Indeed, everybody’s talking about it. We’ve seen that at Canon’s service road shows, at a Xerox’s analyst briefing this past fall in New York City, and with recent MFP introductions from Sharp and others.
Why Should Office Equipment Dealers Care About Security?
Security can open doors and provide a talking point that resonates with most customers. And the best thing about it, this is a talking point that a dealer can apply to virtually everything they are selling.
It’s a very exciting time for Office Equipment Dealers. With so many trends emerging, the opportunity is plentiful. If you’re committed and creative about learning and adding new products, services, and solutions, you’ll surely evolve your business and grow for many years to come.
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