As we all know, this year has brought a lot of changes. Online shopping has skyrocketed, stock values for virtual collaboration software companies like Slack and Zoom have doubled and tripled, respectively, and most people have been working remotely for a lot longer than initially expected when COVID-19 first shutdown the US in March. While some companies have resumed going to the office, the prolonged office closures have significantly impacted the copier industry, and unfortunately for those in the industry, it looks like the work-from-home trend may stick around for the long-term. Given that offices were a strong source of revenue pre-COVID, copier manufacturers have set their sights on a new revenue opportunity – the home office!
Chasing Page Volumes
With most employees working remotely, demand for home office technology equipment, including printers, has increased. Print vendors like HP, Canon, and Epson are challenged to keep up with demand as inventory levels for small, A4-sized devices remain well below normal. For copier dealers, page volumes have essentially shifted from the office to the home, with consumer printing segments boasting year-over-year revenue growth for the last two quarters. Although the consumer print space is a complete deviation from the copier market (think $200 vs. $2,000+ devices), the print manufacturers want a piece of the pie and have adapted their strategies to target this growing segment. After all, companies like Google, Facebook, and Twitter may allow employees to work remotely indefinitely, so there may be some lingering opportunities for copier dealers and manufacturers to support these types of companies and their employees with home office technology.
Enter the Home Office Bundle
In the past year, Xerox, Konica Minolta, HP, and Sharp have developed and released office technology packages designed to support the remote workforce. These bundles, which typically include a desktop printer or MFP and a laptop, but may also offer other office equipment such as a display, keyboard, mouse, and headset; to provide a suitable and scalable work-from-home set-up. Most importantly, the packages serve as an avenue for copier manufacturers to get their print hardware technology into home offices, where people are working and printing, while potentially addressing some key challenges that companies may face when buying office equipment. These include lack of availability, financing/billing, security, and convenience.
Since in-stock status for printers and laptops is on average down compared to pre-COVID levels, the remote work packages provide available purchasing options that can be tailored to customer needs depending on the job requirement and workflow. Across all the offerings, users can opt for a desktop color or monochrome device with print-only functionality, or upgrade to a multifunction model that provides print/copy/scan and fax if desired. When bundled with a laptop computer and added accessories, the packages provide an all-in-one technology solution and a convenient purchasing mechanism, so a company doesn’t have to contend with purchasing individual items – some of which may be on backorder.
Konica Minolta and Xerox offer a range of leading PC brands and models, while Sharp leverages the Dynabook brand (owned by Sharp) to customers looking to acquire comprehensive office technology equipment. All of the packages also include remote service support for troubleshooting issues and an option for toner or ink supplies monitoring and replenishment to ensure seamless operation and reduced manual intervention. Let’s be honest, we all know that running out of ink and toner is a major hassle.
One of the major obstacles for companies and IT administrators amid the pandemic is securing home office technology. The use of personal laptops and printers can increase the risk of security threats (malware attacks and viruses), while potentially exposing confidential information that is shared outside of the company network. HP, Sharp, and Konica Minolta’s bundles, for example, aim to alleviate these concerns with upgradeable security solutions that provide malware protection and proactive monitoring to block unknown intrusions.
Lastly, in an effort to provide flexible financing, the remote work packages feature lease and purchasing options with predictable fixed monthly billing. This business model is designed to provide a simplified cost management structure that may be attractive for both SMBs and larger enterprises with affordable payment plans.
Historically, copier dealers have been profitable selling A3-sized print technology to larger enterprises and corporations, so the pivot to target the home office is relatively new territory, and there are certainly some challenges around supporting and selling PCs versus printers (HP may have an advantage here). In addition, the home office segment may not provide an effective solution post-COVID, given that consumer print hardware sells at substantially lower prices, and pre-COVID, the home printing market has been in decline for the past several years.
Although the focus on the home office may not be a permanent financial solution for the copier manufacturers, the technology bundles should help bridge the gap amid the COVID pandemic, and help capture net new revenue at the lower end of their portfolios for the foreseeable future. Overall, page volumes have steadily declined nearly every year for the last 30 years, and the current demand for home office print equipment is likely not enough to offset the impact on the office segments. Remote work is part of a new reality, and to win in the long-term, copier manufacturers/dealers will need to evaluate workflows and provide solutions that make business processes more efficient in the new normal.
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