This month’s State of the Industry roundtable on leasing, consisting of standalone financing companies and industry manufacturer leasing arms, captured a robust assortment of opinions and reflects the rich assortment of lessors available to dealers/resellers and their end-user clients. The table, as you can see, was fairly full (we almost needed to go looking for extra chairs) and didn’t even encompass all the options on the market.
In the interest of brevity (and this feature was extremely long to begin with) we offer one more question (two in one, actually) for our panel that wasn’t included in our print edition. This question poses: In light of the past two years, can we expect normalization in the leasing landscape? What trends bear watching?
Our roundtable participants are Jennie Fisher, senior vice president and general manager, GreatAmerica Financial Services; Shannon Stangl, head of regional sales, North America, DLL Office Equipment Global Business Unit; Christopher Chando, vice president finance, Ricoh USA; Bill Melo, vice president of marketing and strategic business development, Toshiba America Business Solutions; Michael Bennie, senior director, dealer and sales channel support, Canon Financial Services; Dan Kehr, senior vice president of revenue, FITTLE | Xerox Financial Services; David Palumbo, national director of technology and office imaging sales, CIT Business Capital (a division of First Citizens Bank); and Nick Capparelli, managing director, LEAF.
Fisher: The way the industry thinks about leasing will continue to evolve and diversification is a big driver of this evolution. As dealers adopt more solutions and as-a-service offerings, like VoIP (voice-over IP), marketing, IT (information technology), etc., the financing solutions that support these offerings will also need to evolve. Our bi-annual dealer survey even revealed a significant sample of our customers have plans to offer ecommerce, AI and security.
Diversification is creating an increased need for billing capabilities that allow the bundling of various financing options into a single invoice (1nVOICE). We anticipate continued demand in this area, along with a need to finance and invoice for services. To that end, we have seen our hardware-as-a-rental solution become an increasingly valuable tool when selling Managed IT and ancillary offerings like security, VoIP, and workflow solutions because it makes it easy to layer in innovative technologies as dealers evolve.
Stangl: Leasing may be a more valuable tool than ever in today’s rapidly changing environment. Since 2020, we learned how quickly circumstances may change and the importance of remaining agile. Spending large amounts of capital on equipment may no longer be a viable business strategy; leasing may be more palatable as it offers more flexibility to meet evolving needs.
While printing, copying, and scanning will long remain part of the office, there are new elements being introduced that bear watching. Since 2020, there has been an increased demand for health and safety equipment for offices, like contact tracing technology, sanitization tools and contactless technologies. Additionally, as more employees are returning to the office in a hybrid format, we are seeing a rise in space reservation applications and devices to help manage employees returning to shared spaces. Lastly, we expect to see more offices implementing advanced audio/visual (AV) technology to support more seamless and inclusive videoconferencing that better supports both in-office and remote participants, as well as new audio fencing technology and digital whiteboards.
We’re seeing a real shift in the office of tomorrow, and therefore dealers should focus on diversification in the office equipment space.
Chando: Demand in the dealer channel remains strong, and we are hopeful that the leasing economic outlook will continue to normalize over the coming year. In the meantime, we are keeping a close eye on leasing dynamics to ensure everyone (ourselves, our dealers and the third-party leasing organizations we partner with) remains ahead of any potential challenges, so our dealers and their customers are able to get ahead of rising interest rates and other economic challenges.
From a customer perspective, as we look ahead, two of the big trends likely to impact the leasing landscape in the future are an increased demand to secure financing via self-service e-commerce platforms and new demand for hardware-as-a-service. We’re tracking these two areas closely to ensure we can continue to meet and exceed dealers’ needs as these and other trends continue to evolve.
Melo: Following two years of uncertainty, we are seeing increasing demand for leasing our products and services. This demand approaches what we saw pre-pandemic.
Bennie: The way many businesses operate now is totally different than prior to the pandemic, from where and when employees work, to what their equipment needs are to run their business. Hiring, training, and employee retention have all become more challenging than pre-pandemic.
In some cases, dealers have added additional lines of equipment to complement their current office equipment sales, such as security equipment, telephone systems, and software. CFS’ parent company, Canon U.S.A., is on the cutting edge of many technology advances and has expanded the portfolio of offerings as a direct result of the changing needs and work environment of businesses across the country. Among these new technologies is the AMLOS (Activate My Line of Sight) solution that is currently in development. AMLOS is a hybrid meeting software that can harness the power of Canon’s image-capturing technology designed to help create an immersive hybrid work experience. Recently, Canon teamed up with actor and producer Joseph Gordon-Levitt and company, HitRecord, to show first-hand how Canon’s new hybrid collaboration technology in development can help him and his company create through a virtual, real-time writers’ room experience, which resulted in a short animated film that was premiered at the Ross House in Los Angeles.
Another is the Whiz by SoftBank Robotics, a commercial robot vacuum built on a trusted AI platform to deliver higher quality, more efficient clean, with proof of performance. These additions help expand revenue potential for dealers in areas of business that may not have been involved in before.
Kehr: We are already seeing bright spots as we return to the office and absolutely see upside for financing as a key to enabling new markets and exciting growth opportunities for our dealer partners. The needs of a more distributed workforce continue to drive new innovations in the office and beyond. Dealers can simplify the buying decision for their customers to enable their technology and cash flow needs, by offering total solution financing and payment options that include office technology or other products, pass-through maintenance, software and IT services, and upgrades. We are doubling our efforts and toolsets to support our partners as they expand into new areas.
Palumbo: We’re already seeing the beginnings of a return to business as usual. Back-to-work trends are well underway in much of the U.S. and we expect that trend to continue, but of course, it bears watching month by month. Where employees have returned to the office, we’re naturally seeing an uplift in equipment requirements and utilization. Certainly, the potential rise of further COVID variants needs to be monitored carefully. The end of winter and the arrival of milder weather across the U.S. should allow people to spend more time outdoors, limiting the opportunities for any remaining virus to spread. We are encouraged that vaccines and treatments remain effective, leading to sustained declines in illness, hospitalizations and fatalities. All of which bodes well for the future. But if we’ve learned anything, it’s that the future is very difficult to forecast and we need to watch the trends carefully and continuously.
Capparelli: While I do think the industry will trend toward a little less tumult and a little more stability, I think it’s important to keep in mind that the only constant is change. That said, research into intended office technology spend across key verticals indicates that health care, transportation and logistics, and construction should be three of the best to target through 2022, with automotive, engineering and professional services also offering opportunities. The legal market, a standby for many office technology dealers, looks to be holding steady, while manufacturing, accounting/financial, and retail are down, though not as much as in 2019.
I think one of the most important things to focus on now is ensuring that you’re diversified across key verticals based on projected sales, the propensity to lease, and other factors. Dealers should also be prepared to quickly shift activity among those verticals as opportunities evolve in response to fluctuating demand, changing competitive conditions, and long-term strategic plans.
