I have just completed a series of discussions with industry operators about the state of the market, key trends – and what keeps them awake at night. One of my central observations is that although we all supposedly work in the one ‘office products‘ industry there is such a diversity of issues and fortunes according to the sector, niche or categories we operate in. One persons sleepless night can be anothers proud blush of success.
The strength of the independent dealer community has been a feature over the last year. Overall they have grown at higher than average rates, aided by their close customer contact and operational flexibility during the downturn.
While there are a large number of office product trends affecting different parts of the market, my top three in terms of overall long term impact are as follows. It is worth keeping these in mind as you plan and make decisions for your business in the coming years.
Big issues for the decade
1. Managed print services (MPS) – growth and disruption for dealers. Specialist service providers (often the OEM print supplier themselves -eg HP) are increasingly signing contracts with businesses to provide automatic cartridge replenishment and maintenance services on a per page billing system. These agreements effectively cut out dealers who provide just product (cartridge) supply. It is clear this new system is set to escalate as it is favourable to the OEM’s (and they are pursuing it) plus it is a compelling offer to businesses. With printer cartridges being such a major part of most dealers total sales (often up to 30%) the erosion of this sales stream will certainly be felt and dealers will be forced to search for other offers to businesses.
2. The technological revolution – both a demand stimulant and destroyer. There is no doubt the rapid rate of technology development will continue to transform the range of products used by businesses. So far this has served to expand the industry via electronically-oriented products – particularly those associated with in-house printing (paper, printer cartridges, machines and related products). I have no doubt this revolution will continue to ensure a healthy flow of new products through the OP channel.
However there is also now the looming threat that the combination of advances in software, online services and new electronic screen-based technology may finally be leading, if not to a paperless office then a much lower usage one. As this trend gains momentum a wide range of products related to paper usage will start to decline – and need to be replaced/supplemented with new offerings. In this environment it is likely the current ‘office products‘ offering will need to transition from providing just physical products to providing a range of products and services that revolve around business productivity.
3. The green revolution. This trend is in its infancy. At present the focus is on providing green variations of existing products (industry-driven), however there will be a second and more significant phase once businesses focus on creating low impact and more environmentally efficient processes. This phase will see completely new products/services emerge while at the same time reducing demand for existing products. More on this in a future edition.
Afternote. I hope these observations aren’t perceived as painting a negative future for the office products market. I certainly don’t view it that way. The future is full of opportunity – providing operators evolve and adapt with the market developments. Let me know what you think. firstname.lastname@example.org