To better understand dealer concerns this year, we asked office technology dealers, “What is your most significant cause for concern for the long-term success of your business?” as an open-ended question rather than providing multiple choice answers as in previous years. As a result, we received more substantive data.
We organized the data into five categories, ranked in order of importance to the dealer Survey universe, and supported by comments in alignment with each category. With 298 dealers responding to this question (72% of 415 respondents), these collective comments qualify as a highly accurate reflection of how dealers feel about the future.
We urge our dealer audience that did not participate to compare the following data and insights with their own opinions or feelings.
1. Declining print volume and market changes (including diversification, cost, product quality):
- “Decreasing pages in every business . . . . Competition lowering prices on hardware and to unprecedented levels!”
- “Declining print volume.”
- “Usage seems to decrease on the copier side. Customers consolidate machines; a lot of switches from A3 to A4.”
- “The reduction of office workers and print reduction.”
- “Print: Although the demise has been discussed for years, the uncertainty is cause for concern.”
2.Office technology talent acquisition, retention, aging workforce:
- “Recruiting younger professionals to backfill those retiring in all areas of the imaging business.”
- “The greatest long-term concern is talent, specifically attracting, developing, and retaining the next generation of sales, service, and technical professionals.”
- “Finding and retaining quality ”
- “Need to hire and develop younger people to help us insure longevity.”
3. Competition and market consolidation:
- “The large corporations are swallowing up all of the smaller companies, which seems to be making it harder for a small company to get started.”
- “The approach of the mega dealers.”
- “Competing against the manufacturer.”
- “Big systems buying up all of the smaller dealers and forcing us out.”
- “Competing with the larger dealers. We can always provide better service and customer support but cannot compete with larger dealer pricing.”
4. Economic, political, regulatory uncertainty:
- “Currently tariffs are a concern but, hopefully, those are short-”
- “Erratic political climate, declining prints, and evolution of business models.”
- “Tariffs and trade agreements.”
- “Geopolitical interference.”
- “The uncertainty of the economy.”
5. Technological disruption and AI:
- “Navigating AI.”
- “How AI is going to change the landscape of our industry.”
- “AI, liabilities from IT customers, and regulations on phone services.”
- “Existential threat and opportunity with AI. Buying is going to change rapidly leveraging AI. The diversification of or revenue is crucial for survival and growth.”
- “The advancement of AI.”
Declining print volume and market changes are a well-accepted trend by everyone across the MFP and office technology industry. Virtually all dealers and top manufacturer executives affirm that stealing share is the primary, if not the only way to grow in the traditional document printing space, and this trend will only continue. The question or area of debate remains how quickly will print volume continue to decline, and how additional market changes and disruptions, such as technological innovations and customer demand, may affect the rate of decline.
“To maintain profitability and sustainability, dealers must differentiate themselves, consistently communicating and promoting their specialties and key areas of focus that set them apart from a business with more traditional offerings,” said CJ Cannata, president and CEO of The Cannata Report. “There are growth opportunities associated with printing on virtually any other substrate other than 8 ½ x 11 paper. While we understand that this can require substantial investments and that the device margins are much lower, demand is exponentially growing across multiple markets and the opportunities for recurring revenue in areas like ink, service contracts, and supplies are tremendous.”
Added Cannata, virtually all major manufacturers have been making substantial investments in wide format, production printing, and industrial printing, and some, like Konica Minolta, are also expanding into textile printing. “Investments in these areas are a strong indicator of how the printing industry will continue to evolve,” he noted.
Talent acquisition and retention, along with an aging workforce, have long been concerns in the channel. Attracting the best and brightest talent requires substantial financial investment in order to compete not only within the industry, but also against related sectors such as IT, cybersecurity, and medical technology companies. When it comes to sales talent, the competition includes virtually every business sector.
The IT industry currently has advantages that the dealer channel lacks, at least for the time being. Said Cannata, “The dealer channel has a public relations challenge. Selling or servicing copier machines is viewed as less appealing compared to careers in businesses that specialize in developing IT strategies or providing cybersecurity services—areas that are fundamental to modern business success. Ass long as a dealer remains rooted in the industry’s traditional past,” Cannata added, “it will continue to be challenged by a shrinking talent pool.”
Finally, our last three categories of concern—market consolidation, the economic climate, and AI— share one thing in common: uncertainty. Competition and market consolidation are nothing new, but taking into consideration how dependent the channel is upon products and parts largely manufactured overseas, the current climate is challenging to forecast. What we do know is that the channel is defined by entrepreneurs who have weathered many economic challenges, and we continue to bet on their success.
We weren’t surprised that dealers ranked artificial intelligence as a lower area of concern. While most dealers are at least experimenting with AI, many are using it to enhance communications, improve their tech services, and improve customer service operations. “Embracing technologies that cause disruption is nothing new for the industry,” Cannata pointed out. “Embracing AI will likely lead to dealers becoming more automated and more efficient, which will, at least in part, help to address or offset many of the top areas of concern cited by dealers in our Survey.”
40th Annual Office Technology Dealer Survey Posts (Part 1):
40th Annual Office Technology Dealer Survey: Universe and Methodology
40th Annual Office Technology Dealer Survey: Executive Summary (Part 1 of 2)
40th Annual Office Technology Dealer Survey: Dealer Revenue Breakdown in 2024
40th Annual Office Technology Dealer Survey: Manufacturer Distribution
40th Annual Office Technology Dealer Survey: A3, A4, and Managed Print Services
40th Annual Office Technology Dealer Survey: Production Printing Can Improve Profitability
40th Annual Office Technology Dealer Survey: Managed IT Revenue Rose by Nearly 30%
40th Annual Office Technology Dealer Survey: Obstacles to Improving Profitability
40th Annual Office Technology Dealer Survey: Acquisition Trends
40th Annual Office Technology Dealer Survey Posts (Part 2):
40th Annual Office Technology Dealer Survey: Executive Summary (Part 2 of 2)
40th Annual Office Technology Dealer Survey: A3 Manufacturer Ratings
40th Annual Office Technology Dealer Survey: A4 Manufacturer Ratings
40th Annual Office Technology Dealer Survey: Leasing Company Ratings
40th Annual Dealer Survey: Causes of Concern for Long-Term Success
