Operating in an environment featuring not only the widespread consolidation of dealers, but also the convergence of channel suppliers, makes these interesting times indeed for those charged with marketing to the space. Add to that the rapidly growing sophistication level of customer needs, a substantial spike in demand for end user document accuracy and security, and an increasingly stratified set of both customers and product categories, and the segment is anything but dull today.
Three frontline experts from the dealer, supplier and remanufacturing perspectives with a clear market purview share their take here on today’s rapidly evolving customer, significant sector changes that impact marketing, and winning formulas to meet key customer needs in the immediate term.
A departure from decades past
According to our experts, from product categories and talent gaps to the market players themselves, the rate of change within the larger imaging ecosystem is substantial and only promises to accelerate. Marketers within the channel would be well served to observe these new developments in their strategic pursuits.
Clover Imaging Group President Eric Martin points to the shrinking number of players in the space as a striking change from years past, with untold market impact. “Because traditional toner sales alone obviously aren’t enough to compete with the OEMs, we’ve seen no shortage of traditional office product resellers entering the managed print space through various means, such as the DEX Imaging acquisition by Staples. However, beyond the traditional OEM and dealer business consolidation we’ve seen so far, I believe there is a new convergence of nontraditional consolidation coming that will not only further consolidate the industry, but change the entire landscape and how we operate within the market.”
He explains, “We’ve traditionally seen consolidation of BTA and office supply dealers. But because it’s all about monthly recurring revenue today, and managing the entire office as a service is becoming an increasingly powerful strategy, we’re also going to see a shift here: The convergence of BTA dealers buying managed IT service companies and the office products set getting into managed print. Further narrowing the market will be OEMs, through their aggressive patent protection initiatives. Some recent examples include Epson and Lexmark, both of which have done a phenomenal job wiping out the clone market to take back market share.”
With an acknowledging nod to that contracting market from the independent dealer perspective, Brown Office Supply President Jeffrey Brown shares, “In 2020 you’ve either got to get on board or go out of business.” He explains, “There’s really no viable inroad today for a new generation of independent dealers. A huge talent gap exists right now between new college grads entering the space and experienced sales professionals at independent dealers and large retailers alike. Relationship selling is anything but intuitive. As an independent reseller, I can’t easily afford to go out and hire two or three salespeople at the rate of $75K per year each and mentor them to the extent they must be mentored to be successful.”
Pointing to not only elusive selling skills but also the substantial capital needed to acquire an existing dealership or finance a startup, Brown points to a new era of the independent dealer segment at a clear competitive disadvantage. “Because this underserved demographic is unable to successfully operate at the independent dealer level, small, seasoned dealers with decades of experience will take market share and — through the financial leverage they have to onboard novice talent — the Staples-sized retailers of the world will dominate.”
In the coming decade, ECI subject matter expert in end user solutions Paul Giorgi predicts unseen levels of tech advancements engineered to fortify data integrity and document security. “Looking at the unprecedented progress made during the first 10 years of the century, the next five are really going to be a big unknown. Consider this: We didn’t have iPhones in the early 2000s, and in 2007 that technology development completely changed the workplace.”
Highlighting what he believes will inspire the next wave of industry-changing technology innovation, he shares, “In the era we live in now, featuring an incredible amount of false information and fake data, there is growing demand for transparency. I think there will be a substantial push for document accuracy, technology-fueled authorization, and the development of solutions that ensure users and the general public documents are absolutely secure. Blockchain technology was introduced to ensure the legitimacy of currency funding and transfer, ultimately altering the Internet of Things and making document verification a cursory practice. I believe that technology will harden the integrity of source documents and subsequent document changes.”
The new imaging customer
Against the backdrop of emerging national laws, the ever-changing office environment, and an increase in customer segments, only the faint silhouette of yesterday’s customer archetypes remains today. Our experts share several hallmark changes sure to drive new marketing strategies with the best chance of winning market share tomorrow.
“The imaging channel is increasingly stratified today,” says Martin. “Our dealer client is expanding their reach to more market segments, more product categories, and a broader range of business — from transactional to complete service offerings, at every size from enterprise to small business customers. Enterprise and large customers are looking at MPS, while midsized to small customers still favor transactional ordering. To operate successfully in this dynamic environment, we’re serving the widely varied needs of both, right down to launching customer websites to drive inbound marketing, and providing third party logistic services that free customers from doing their own distribution.”
Martin also reports customer demand for sustainable products has recently matured beyond environmental consciousness alone to an urgent imperative to comply with national laws. He explains, “Canada just followed Europe’s lead and outlawed certain types of single-use plastic, with the U.S. expected to soon follow suit. In the face of increasing regulatory requirements, and the recognition that ‘going green’ is both good for the planet and corporate image, companies of all sizes are searching for cost-effective ways to reduce their environmental impact. This positions savvy remanufacturers particularly well, as switching from single-use OEM to remanufactured imaging products is a key green initiative that can reduce a company’s environmental footprint while providing an immediate cost savings.”
“Driven largely by the growth of digital hubs, the sophistication level of customers has substantially increased,” adds Giorgi. “With lots of shared office environments, it’s no longer simply about supplying a device, but about providing complete solutions via multifunction devices with greater capability. However, while the sophistication level of customers has grown substantially over the last five years, we’ve also lost about 50 percent of dealers over the last 10.” Pointing to the clear challenge this represents for meeting those increasingly sophisticated customer needs, he adds, “Right now, this expanded set of customer demands must be met by a dealer community challenged with relevancy. Manufacturers are working to meet this need with tablet-style interfaces and app additions that serve as office work hubs. It’s in dealers’ best interests to adapt their longstanding marketing strategies to those needs and incentivize their teams to show off and sell those apps.”
Giorgi is willing to bet that demand for these customer solutions will only grow into the future. “Take for example office environments shared by more than one company all along the California coast. In each of those spaces, all you have is a Wi-Fi password to produce and scan documents, and are reliant on multi-function printers (MFPs) to get those documents to the right place at the right time. As MFPs continue to do these things natively, the foundational technology changes that will naturally happen are the advancement of document version control, the development of increasingly smart devices, and ultimately Artificial Intelligence (AI), which will take a pivotal role in making the world flow more smoothly.”
The winning formula
So, what approach in 2020 is best engineered to win market share in the channel? Several roads lead to the promised land, as our frontline experts reveal.
“The stakes are high, with customers demanding supplier responsiveness across the trifecta of quality product, cost savings and a diversified portfolio,” says Martin. “Serving the big retailers, OEMs and distributors, we’ve experienced clear, emerging expectations for not only second-to-none, high quality product available at a cost savings to customers, but also a diversified portfolio and services that others simply don’t offer like automated supplies management.”
He admits, “The name of the game is really responsiveness. And the benefit of being nimble translates into substantial cost savings across the board for customers that are all in with us. They get a huge breadth of additional services, which helps our dealers rationalize their inventory and forecast needs — helping us both at the same time. From same-day shipping to hardware financing, to refurbished parts and marketing services all the way down to website builds, we continue to add dealer services.”
If you ask Brown, a faithful return to the core tenets that his business was built on remains the clear winning approach. “Successfully meeting customer needs in 2020 isn’t about the next tech release or business model reinvention, but a superior customer experience. It’s as true today as it was 50 years ago: The bedrock of relationship building benefits not only the customer but the bottom line. And while to some, it may seem a tired and worn out statement of service, striving to under-promise and over-deliver is still where it’s at,” he says.
On occasions that Murphy’s Law might throw a wrench in that well-intentioned approach, he explains that generous servings of humble pie are the best course of action. “As a human being, I know I’m going to make a mistake, but I can’t go back to the well making the same mistake again and again. Beyond the selling alone, staying a step ahead of would-be issues by alerting clients to hiccups early, apologizing, and proactively sharing how you’re going to rectify the situation is crucial to relationship building and management.”
According to Giorgi, nimble and responsive solution development leads the pack of winning marketing solutions for the channel in 2020 and will continue to do so in the coming years. “The way work has changed through growing remote engagements and the ‘gig economy’ — where working, getting paid and moving on are the norm — fundamental end user needs are morphing. There is a clear growing need to securely move documents across every medium, from email to content management platforms. When it comes to creating and evolving content in an environment that people around the world need access to, the level of security currently available beyond the confines of a corporate network just isn’t robust enough for the masses to comfortably move forward with. That solution is the clear winning formula, and I predict we’ll see an unbelievably fast evolution of the back-end technology to fortify that security within the next five years.”
Against the flurry of these exciting new channel influences, mainstay Darwinian philosophy rings true for those charged with marketing to the channel. It’s not the strongest or most intelligent that survive, but those inclined to adapt. As our experts allude, the coming year — if not decade — promises no shortage of opportunities to respond.