Industrial Print, Enhanced MFPs, IT Services, and Vertical Market Opportunities on the 2019 Horizon
Top: Loffler Companies’ Network Operating Center (NOC); photo taken during 2018 Dealer Tour Visit.
If you want to understand the nature of change and what you can expect for the future, you must understand the challenges participants are facing today. For the imaging industry, it is easy to define the most significant problem it is currently dealing with. If you said deterioration of print in the office, you win the grand prize.
During our recent trip to Japan, two manufacturers we visited stated the MFP business will experience a decline of 2.5% per year (with no chance of recovery). Another said that currently, imaging in the office represents 53% of its business and within five years, it will decrease to 39%.
Because of those trends, in seeking a solution, you must seek new business or businesses that are reasonably synergistic to your current business. A way must be found to improve click counts outside the office. In addition, you should seek opportunities with technology that continues to evolve in printing.
The first thing that comes to mind is production print. From a sales perspective, you’d be moving from a copy/print/scan environment to a digital cut-sheet printer. These devices offer higher speeds, greater finishing capabilities, and the opportunity to compete in the graphic segment of the market. In addition, this area offers an opportunity to address a different audience””commercial and industrial print organizations.
For dealers that understand they need to do something, production print makes sense. It increases the average unit selling price and provides added clicks. With production print, one well-placed digital cut-sheet press is equal to installing five or six MFPS. Software adds are a bonus, as the competition demands print devices offer the greatest functionality possible, and the best way to do that is through specialty software programs that enhance the printing process. Service revenue is a given, and there, dealers have a complete package.
We fully anticipate dealers already in the production print space will continue the upward spiral and move into industrial print. The leading dealers for manufacturers such as Canon, Konica Minolta, and Ricoh are all attuned to provide an increasing flow of production-print products. Canon and Ricoh are aggressively expanding their inkjet offerings, which opens another new avenue for growth and expansion. Konica Minolta is not far behind and has forged partnerships with Kimouri and MGI to further the company’s understanding of industrial print.
For those dealers well entrenched in production print, the migration to industrial print will create the potential to participate in a market that is growing at a rate of 28% per year, according to InPrint, the organization that hosts international exhibitions for the industrial print industry. There is no other segment of the imaging space that offers anything like that rate of growth.
PULL QUOTE: For those dealers well entrenched in production print, the migration to industrial print will create the potential to participate in a market that is growing at a rate of 28% per year.
In addition to production and industrial print, offshore manufacturers will begin to promote products that employ augmented reality and artificial intelligence. These technologies will be utilized to expand the capabilities of the MFP. However, the year 2019 will only represent the beginning of this expansive technology and its impact, at least initially.
Elsewhere, over the next two to three years, we expect to see a growing vertical market approach addressing healthcare and education. We also foresee a continuation of the expansion of IT services. The dealers that employ a strategy that incorporates both production print and managed network services will reap a whirlwind of opportunity.
In this brief analysis, we feel we stand on solid ground in our forecast for the new year. With the benefit of our Annual Dealer Survey, we will continue to measure and reflect their performance, as well as monitor the driving trends propelling their businesses into the future.
We look forward to observing, recording and commenting on these shifts we addressed. However, the final arbiter of our prognostications is the level or degree of changes that dealers are willing to make.
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