In order to help you, as a dealer, understand where to focus looking forward into 2019, we must first consider what type of dealership you are. At Keypoint Intelligence, we give a lot of credit to those who started out as entrepreneurs, pioneering their way into the office equipment industry. Our industry dealers have continuously transformed with technology, moving from analog to digital, from selling software to selling solutions; they have come a long way. This spirit has enabled dealers to continue to exist and thrive, where in other industries, we have seen channels disappear and go away. At the same time, we see outside forces, such as mobility and IT trends, continually change and challenge our core businesses.
What Does the Future of Office Technology and Supplies Look Like?
If we look at the future trends of our North America hardware and supplies forecast, we see that traditional hardware and supplies continue to decline until 2021 at about -1.7% and -1.6% respectively. Additionally, we see competition becoming fiercer, dealers acquiring dealers, as well as manufacturers acquiring other manufacturers. Manufacturers are also transforming their businesses by looking at other areas of growth; in some cases with new technologies that stem further away from the box, as well as new solutions and services, to help drive efficiencies for both them and their dealer partners.
With the US economy still looking good, we believe that 2019 should be a year of expansion and investment for dealers. Keypoint Intelligence suggests dealers look at two strategic paths in order to continue growth. Those seeking to be innovation driven should look to new technologies to diversify their offerings. The more operations driven dealerships can look at methods for driving efficiencies that will improve margin and revenue growth.
Innovations Driven Dealers
While traditional A3/A4, break/fix products and services are still core to a dealer’s business, there is an opportunity to expand focus beyond these areas in the next year. Those who hope to grow through innovations can look to new products, including hardware, solutions, or services, in order to diversify their offerings.
Besides focusing on A3 and A4 devices, today’s most successful dealers are beginning to direct more attention toward other equipment such as light production, 3D, and wide format products. Dealers that are a bit more entrepreneurial are investing in areas such as production printing, industrial printing, and packaging equipment. The transformation from analog to digital production has opened page volume opportunities. In fact, almost half of the available cut sheet pages are now coming from digital production devices.
However, getting into these areas does require a significant commitment and investment. Not only do dealers need to commit to a new service infrastructure, but it also requires them to make large investments in production software solutions that drive these machines. In some cases, partnering with the right OEM and financial institution, like GreatAmerica, can help dealers with these investments.
Today we see a lot of focus on output management as a core solution. Moving into 2019 and further away from the box, dealers should look at investing in security, cloud, business process automation, and workflow solutions. As security continues to be the most important focus for almost every organization, securing the print environment is as crucial as securing any device on the network. We have seen that hackers look to the weakest link in the infrastructure to penetrate the network, and since printers are often ignored, they have become a primary target. Print management and other print security solutions can mitigate these threats, making them a no brainer for organizations of all sizes.
Dealers should also look to invest in other areas that help improve customers’ business processes as customers, too, are seeking these solutions. Capture, workflow, and cloud content management solutions offer great margin opportunities as well as professional services that improve the stickiness and differentiation with customers. There are several Independent Software Vendors that are also helping dealers package solutions into simple turn key offerings, specific to areas within the organization, making education and deployment easier.
Today, the mainstream has come to embrace MPS, but dealers who are more services oriented will find further opportunity in exploring areas like network/managed IT services and Smart Workplace solutions and services.
Smart Workplace solutions and services are the convergence and transition of Smart Home solutions into the workplace. By combining hardware, software, services, and the Internet of Things, everyday common business tasks are automated and simplified.
Just as with a Smart Home, we see automation solutions, such as thermostat/HVAC and lighting becoming internet connected to control the usage and efficiencies of these devices. From our industry, we are seeing manufacturers providing solutions and services around security cameras, conference room automation, and digital display technologies. Although these may be at the bleeding edge of our business, these solutions will continue to penetrate the office environment and dealers that want to stay innovative and current with office technologies should look to these solutions and services to remain relevant to their customers.
Operations Driven Dealers
What many dealers don’t think about are the operational innovations they should be making to streamline their businesses and make better decisions within their own organizations. Today most dealers have invested in industry ERP, CRM, and Device Management-MPS solutions that help enable their dealerships to operate more efficiently. However, as we move into 2019 and become more data driven, these tools, with their abundance of information and data, can inform better business decisions that improve focus and competitive positioning.
Predictive Analytics for Service
Service should be the most profitable area of a dealer’s business and driving efficiencies around service is something all dealers should strive for. Dealers today are moving their service operations from being reactive to proactive.
However, where there is real cost savings opportunity is in predictive service; projecting when a service outage could occur and operationalizing the business around these events. Part of the challenge is predicting when a service outage is going to happen and then modeling the supply chain around all of these events. Utilizing tools from manufacturers, as well as other service metric tools, can provide the information needed to help predict these events.
Sales Driven Analytics
Dealers are already collecting data, like meter readings, from organizations with their printers installed. This data can be leveraged to gain a better understanding of print habits for different departments or individuals or departments within an organization. Tapping into this data may further uncover a sales opportunity to offer a business process improvement for that department.
Another example can come from your ERP data about the current customers you serve. When segmenting your customer lists into verticals, you can see device and print trends that can help further analyze your organization’s abilities in those vertical markets and capitalize on those strengths.
Additionally, you can use this information to create sales territories that can identify and focus sales strengths when it comes to selling into various customer segments.
Many dealers oftentimes see marketing as a sales activity instead of a separate, strategic focus. Marketing helps communicate to your clients the type of organization you are and provides the thought leadership organizations look for in a trusted partner. Additionally, as dealers begin to provide solutions and services that are outside their traditional core offerings, it’s important they are able to portray themselves as more than just a box provider, but instead, a truly trusted consultant. There are several tools and content in the market that can help dealers craft messaging to position themselves in this way. Analytics solutions to target the right customers are available to help focus strategies instead of using a gunshot approach.
What Does 2019 Look Like For You
As we look toward 2019, there are several areas that dealers can investigate and potentially invest in. The key is to take action; whether it is in technology and services, operations and analytics, or a combination approach, the time to move is now. There is a window of opportunity to differentiate or accelerate one’s business. As an entity with entrepreneurial drive and a spirit that has been able to weather big storms to come out on the other side transformed, dealers that continue to make the right moves will thrive for years to come.