Research shows that there are an average of 1.8 printers in every home, and while .8 of a printer might not be quite up to the task, the statistic is nevertheless compelling. As more printers appear in the home, they are being used for a greater range of tasks, from recreational printing of photographs and web pages, to educational and home office uses.
“Historically too much of what has been provided has tried to address everybody and there are some additional benefits that can be provided when you start to segment a big market like the consumer market,” said Stephen Bell, Marketing Manager for Lexmark.
Not everyone who is looking for a home printer requires the same functionality, and often the perception of the home printer’s primary tasks is different from the reality. Lexmark’s research shows that catalogues and reviews tend to put a heavy emphasis on the photo printing capability of the product, when only a tiny 8% of the pages printed on a home-based ink jet are photos. An enormous 57% of the pages are actually black and white text and another 30% are colour graphics. “People are still printing more, it’s just the nature of what they are printing is changing, or is slightly different to what the general perception might be,” said Bell. With this in mind, it is important to make sure you are selling your customer the right printer for their needs and not making incorrect assumptions of their printing habits.
Changes in printer preferences
In our last consumer printing feature we noted a trend toward more MFPs (multi-function printers) in the home, and this is still clearly evident in the market. According to research by Gartner, print technology providers add proprietary features to their technology and customise the services and software around their products to resist the pull of commoditisation. Today, with more people working remotely from home or running a micro- or small business from their residence, the consumer printer market is all about bringing business printing capabilities in to the home. If you are working at 10:00 at night, the last thing you want is to lose productivity due to a deficiency in your home-based technology.
Despite the drop in price of laser printers, ink jet is still the printer of choice for the home user, thanks to the low hardware costs and ever expanding list of features, from networking devices to ‘green’ capabilities. “Ink jet has been the dominant technology of choice in the market for many years and industry forecasts show this will continue in the future,” said Nika Maltseva, Marketing Manager for Epson New Zealand.
Daryn Rickwood, HP’s National Consumer Sales Manager, Imaging & Printing Group, estimates that ink jets still make up around 90% of the consumer market. The decreasing cost of laser hardware and increasing amount of home-based printing, however, means that there is a growing home-user laser market.
Samsung, a relative newcomer to the printer market, has launched a range of compact, low cost and good looking laser products. Samsung’s Jeff Lau, National Sales Manager, IT, told The Channel that “in the past people perceived laser printers as too expensive for the home environment, not because of the running cost, but because of the initial hardware cost. In the home environment they didn’t print enough, so why not just buy a cheap ink jet? Now we have some laser printers down to a hardware price that is acceptable to the home market. We have a mono laser at $99 and every page it prints costs about 3c.We see the demand for laser printers is definitely there because people print more and the running cost increasingly becomes an issue for them”.
Shirley Wigley, Country Sales Manager New Zealand for Fuji Xerox Printers added, “When consumers purchase they like choice, and we find as long as we offer choices to consumers they will make up their mind based on what their needs are. In the case of consumers who want quality of reproduction on a page and an image that lasts, nine times out of 10 they will buy laser”.
While laser printers do not print onto photographic paper, they do produce a fast print speed and high quality, and new compact designs in sleek black mean they can blend in to the home office environment.
Sell a solution
As we know, customers want more than just a printer, even though they might not know it yet. Just as we use only about 10% of our brain capacity, many consumers use only about 10% of the capacity of their printers. This means they either bought a printer with the wrong suite of features for their needs or they simply don’t understand the full capabilities of their equipment. This is why education of resellers, retailers and the general public is so important.
Find out as much about the customers’ printing needs as possible and then suggest the best possible solution for them. Always keep up to date with the newest features available and think outside the square when it comes to using them. How, for instance, can scanning optimise the way a business runs? Perhaps it could be used to scan all tax receipts so they are filed electronically by date or theme and are easily accessible without having to wade through piles of tiny scraps of archived paper. “We are trying to educate and provide functionality in our products to help people become more productive when they scan documents, in terms of being able to file that document intelligently, share it more easily and locate it again by being able to search for key words,” said Bell.
Now that the average household has more than one PC or laptop, the new range of printers with networking capability will create a tidy solution and eliminate the mass of cables trailing around the house or the need to buy extra hardware.
Of course, the education process is not one sided; it has to come from both ends, Epson’s Maltseva explained. Manufacturers and distributors need to educate their market partners, but customers should be able to access information easily too, through their nearest retailers or online.
Don’t forget consumables
Not only do you want to sell consumers the right printer but you also want to sell them their consumables and gain ongoing annuity streams off the ink. As HP’s Rickwood said, “The printers themselves at an entry level are becoming a commoditised item, so no one makes money at that point”. The average margin on a printer should be between 15-25% but the real money lies in attaching other items such as consumables and media. No one should walk out of a store having only bought a printer – you need to sell them the cartridges and paper too. Nutech’s Business Unit Manager, Nigel Willard said, “The reseller’s challenge is to make a statement at the time of purchase that they are the place to come back to.”
Rickwood believes the reason the Warehouse Stationery is so successful in the consumer part of the business is because they are a destination store. “The only way you are going to challenge those types of outlets is to become a destination store yourself and that takes a while.” To do that you need to carry the right stock, arm yourselves technically so you are experts in your field and have the product out ‘live’ in the store.
“A stationery shop’s core business is not printers and consumables supplies; their expertise would not be talking about what would be core business for our resellers,” explained Fuji Xerox Printers’ Wigley. In other words, make sure you are the specialists so that customers always return to you. You don’t necessarily have to be the cheapest, but you do need to be the most knowledgeable and helpful – you need to provide value for money in terms of service.
The wide range of consumables available in the market place means that often they do require guidance in choosing the correct grade of ink or paper for their specific usage intentions. A lot of research has been done that has proven that sales increase if a cartridge is out ‘live’ in the store. Nutech’s Willard explained – “A lot of people hide their consumables away behind the counter. Customers like to actually be able to look, feel and touch the box and make sure it is the right cartridge; they don’t like to ask and look stupid.” Of course, this brings up issues of security, since manufactures often do not supply dummy boxes, but finding a practical way to display consumables so customers can experience them first hand before asking for advice is one way to boost sales.
The real challenge, though, and perhaps one of the biggest untapped opportunities in the consumer printing market, is locking people into some sort of deal and earning their loyalty. This is particularly difficult for retail stores where the consumer printer sales are transaction based and do not require any long term contracts. One way to ensure repeat customers would be to run a loyalty card program, rather like a coffee card, where every tenth purchase is free or some such other promise. Without promotions or product bundling, it falls to the sales person to make the right impact to ensure that the customer chooses to return when they need to refresh their supplies.
For resellers catering to the micro- and small businesses, however, this is an area of opportunity. “By setting up the infrastructure and the capability and arrangements where it becomes easier for the consumer to deal with resellers I think they’ll get a greater share of the consumables market,” explained Lexmark’s Bell. The majority of New Zealand businesses are in the small- to medium-sized range and often the small business owner will simply go to a retail store. Resellers should be trying to harness this potential customer base and selling ink and paper on a contract basis.
The green theme
As with everything, the ‘green theme’ is making itself know in the consumer printing market. “A big trend is addressing consumers’ concerns about the environment and sustainability,” said Bell. Interestingly, research into the lifecycle of their products showed that the most significant period of impact on the environment was in the consumer usage phase. Paper has a big impact, so it will be no surprise if double-sided printing (known as duplexing) and multi-up functions (printing multiple pages on one page) become a primary concern for purchasers in the future, along with power save buttons and recyclable cartridges.
Many companies, including Canon, Lexmark and HP are partners with the Australian-based Planet Ark scheme, which recycles virtually 100% of the expired cartridges it collects. Some of the foam from ink jet cartridges becomes carpet underlay, while the plastic is made into e-wood – a plastic wood substitute that can be made into anything from stationery items to furniture – and the excess cartridge ink is used to colour the e-wood.
Nutech also runs a subsidiary company called TRC (Toner Recycling Centre) which is the biggest collector of ink and toner cartridges in New Zealand. “Anyone can deposit their empties. For the home user the best option is to find our collection boxes in various retailers including Warehouse Stationery, Dick Smith and OPD,” confirmed Nutech’s Willard. TRC collects upwards of 40,000 cartridges per month with about 95% of the material being recyclable.
Most companies are looking at being more environmentally friendly through the inclusion of ‘green’ functions, more compact printer designs, recycling programs and greener manufacturing protocols. Fuji Xerox Printers has also run a marketing campaign whereby purchasers of their printers were awarded carbon neutral flights.
Selling consumer printers is not so different from selling to corporate businesses. You still need to sell a solution and make sure the product fits your customers’ needs and expectations. Bear in mind, however, that the decision making process at the consumer end of the market is much faster. You only have a very short time to put across a snapshot of the product and what it can do for the customer in a succinct, easy-to-understand manner. Consumer customers do expect something upfront and are more interested in the immediate hardware costs and the functionality than cost per page over the printer’s lifespan. Improve your margins by attaching consumables to your sale and ensure that they think of you when they have any further printing needs.