A channel guide to selling printers

For a market long predicted to be doomed, printing is looking remarkably good – albeit it's a considerably different market place now.

Heather Wright takes a look at the new(er) face of printing in a four-part feature.

Colour printing at 100,000 dots per inch, 3D printers being used to construct a lightweight plastic exoskeleton, a liveable house and the next Mars rovers... printing has certainly garnered some interesting headlines in recent months.

But back on planet earth, it's the more mundane issues of mobility, cost reduction and smooth workflow solutions which industry analysts IDC see as key trends driving the sector locally, with, yes, cloud-enabled product and services also beginning to play a hand.

"The printing industry is no longer a business that sells only the boxes; it includes solutions and services to enhance end users' expectations," notes Cheryl Looi, IDC Asia Pacific (ANZ) market analyst, who says security printing is also a key trend at the moment.

"The most recent [international] trend already has minor existence in the New Zealand market – the cloud enabled product and services," Looi says.

"Most hardcopy vendors already have a road map on how they could leverage on cloud services to shift away from the traditional way of just selling a box and to extend its customer value proposition.

"However, there are a lot of concerns such as cost, collaboration with current IT systems and accessibility to information which hardcopy vendors need to address in order to gain more widespread adoption.

Doing the math

IDC figures put Brother at the top of the printer market – laser and inkjet – in New Zealand, with 39%, followed by Canon on 24% and HP on 14%.

Last year, the analysts reported a flat year for the overall Australia and New Zealand printer market, with 2.6 million boxes sold, about the same as 2010 with natural disasters and weak consumer and business sentiment due to the global economic outlook impacting.

However, IDC predicted a recovery in 2012, with a 5% increase in overall printer sales predicted for the region this year.

"We expect multifunction inkjet printers and colour lasers to drive printer sales in 2012," Looi says. "Aggressive price competition and more product refreshes will definitely continue as print vendors attempt to increase market share, benefiting end users.

Opportunity ahoy

Cheryl Looi, IDC Asia Pacific (ANZ) market analyst, says there are still plenty of opportunities for the New Zealand reseller channel, with channel partners able to address the evolving printing ecosystem gaining a competitive advantage.

Leveraging key trends such as mobility and workflow solutions, will provide key opportunities.

"Hardcopy vendors will continue the search of channel partners who run their business outside the traditional office solution channel," she notes.

"Take for instance, 'one-stop' IT resellers who offer a range of services that covers beyond printing devices.

"In a mature and increasingly commoditised hardcopy market, finer customer segmentation is needed.

"By catering to these specific requirements, such as key vertical markets and company size opportunities, the greater the chance of success exists in building a long-lasting customer relationship which in turn attracts the vendor to partner with these resellers.

Justin Tye, Exeed managing director, adds the 'virtualisation of print', standalone device consolidation into multifunction, higher capacity devices; and faster adoption of colour as pricing becomes easier to understand across managed print contracts and more competitive to attract more customers to use colour as other key trends being
seen locally at the moment.

Also playing a role: the uptake of wireless printing. "Continued innovation around e-print technologies will create some nice solution opportunities for resellers looking to extract better profits out of the category," he adds.

And he says bundling will become more pervasive as resellers and retailers look at ways to extract annuity from low margin hardware sales.

Exeed, which has long distributed HP product including printers, recently added Fuji Xerox to its portfolio of offerings with its purchase of the distribution business of Renaissance.

Tye says printing isn't as large a part of Exeed's business as it originally was due to significant ASP erosion over the years and the business being outpaced by other categories such as PC, networking and servers.

However, he says gaining Fuji Xerox is 'very' significant for Exeed. "We have an excellent relationship with HP, but having an alternative to sell when supply is constrained, price points are not obtainable for the type of device and products are not available within the range, is critical to us.

"Fuji Xerox have put a lot of effort into their channel programme. It's simple and draws on a huge knowledge base around their copier business, so it's great to have access to that IP.

Tye says it's always a risk relying solely on one supplier, though he notes that 'fortunately for us we have not had any significant challenges with HP over the years, but we are looking forward to being able to offer our customers choice when required'.

Consumer side

Matthew Stroud, Brother International (NZ) chief operating officer, notes that pricing other than rock bottom, is returning to the retail market, as consumers become more savvy about buying the right printer, rather than just the cheapest.

"Only a year ago there was a race to zero, with printers dropping to $39, $29, but that absolute entry level race is over and we're seeing much smarter consumers who are looking for the right product, as opposed to just the cheapest.

"They're much more savvy about running costs and have realised that sometimes the running costs can be more than the printer itself.

Stroud says close to 75% of total turnover is now in two distinct retail categories – the $99 to $199 models and the $199-$299 models.

"From a channel point of view, that's good news that the price is coming up.

But with that change in consumer attitude, comes a change for resellers. Stroud says it's crucial that resellers ask the right questions to ascertain exactly what a customer needs from their printer.

"More often than not you can upsell if you ask the right, simple, questions such as how much are they going to print and do they only need black and white?

Stroud says Brother is increasingly seeing colour lasers moving into the small office, home office space with the cost of special photo printing paper in order to get high-quality colour print, putting some users off inkjet.

"Resellers really need to understand the different technologies so they can ensure customers get the best product for their needs.

"If they walk out with the cheapest, they may well end up unhappy and not come back.

MPS me?

A few years ago, the battle was between traditional printers, multi-function devices and copiers. Then along came managed print services.

Looi says New Zealand is a 'mature' MPS market and adoption rates have remained stagnant at around 30% to 40% since 2008.

"Many organisations do not see the long term return of investment and benefit," she says. "Also, decision makers tend to shift their focus to higher priority investments such as PCs and servers. Hence, this explains the sluggish uptake of MPS in New Zealand. Similar reasons do occur in other countries such as Australia.

"However, in the longer term, IDC's view is tha the continued focus on digitising workflows and improving the end-user computing environment combined with the perennial desire to take out cost will result in greater MPS adoption.

Last words


Tye adds that resellers looking to capitalise on the printing market opportunities should also ensure they are involved, if possible, in contracts where there are moves by government to consolidate supply.

"Also, keep up to speed with the latest developments in e-print and innovative technologies from other vendors. And finally, they must engage suppliers in the transactions, whether commercial or consumer.

"This is the key to long term sustainability for anyone selling successfully in this space," he says.

"Understand selling managed print, know what the latest innovations are so you can easily create a selling point of difference and preserve margin, always attach and manage supplies annuities.

"If you stick to these principles, you should be able to successfully sell across the range to a wide variety of customers.