2023 Trends: The Worst Is Behind Us; It’s Time to Move Forward

As we clean up the crumbs of Sociables crackers, meat-and-cheese platters and empty bottles of Pinot Noir, two things are readily apparent. One, the worst of the pandemic is now long gone. Two, the ramifications of COVID-19 are with us, perhaps forever.

Take a bow, C-19. You forever changed the world’s views toward employment, causing workers across the globe to job-hop in record numbers and effectively drying out the talent pool (insert your own global warming joke). You’ve decentralized the work space, turning dens, family rooms and kitchen tables into makeshift (now permanent) workspaces. COVID-19 also hastened the downward trend of declining print usage, launching large A3 units into an uncertain future. Supply chains broke and have yet to fully mend. Inflation soars, costs rise, but hopes do not plummet—unless a recession awaits.

We move forward together, vacillating between 2023 as a time of challenge and opportunity. In-person events are returning, which means greater opportunity to share more ideas. Supply chain woes are decreasing, and many dealers are mobilizing for mass placements. M&A continues with vigor, symbolizing a period of significant strategy for all industry providers. Diversification and digital transformation portend a brighter and more viable future. Maybe it’s the industry that should take a bow, having endured the worst of business conditions while managing to keep the lights on.

There’s a much stronger need for high-capacity scanners due to an acceleration in the digitization of documents as well as the need for cloud solutions that increase productivity related to workflows.

– Bob Burnett, Brother International

As we welcome 2023 through optimistic, hopeful eyes, a bevy of experts from across the office technology landscape have provided their views for our annual State of the Industry trends and predictions articles. This article will focus on the myriad of trends that our panel believes bear watching in the new year, and an accompanying predictions article can be found on page 22. Many of these trends aren’t newcomers, but there are one or two (such as decentralized workers) that are newer and poised to remain with us indefinitely. One thing’s certain: all these trends weave together and shape the way we approach the industry, now and for all times.

Decentralized Doings

As the pandemic continues to fade in our collective rearview mirror, it’s becoming increasingly apparent that companies will continue to embrace hybrid work models. That’s evidenced by the growing number of workplaces implementing flexible work schedules that allow employees to work from home throughout most, if not all, of the week. As such, notes Bob Burnett, director, B2B solutions development and planning for Brother International, there’s a rich opportunity for resellers to provide solutions that speak to the decentralized worker.

“Both in-person and remote employees need to have a similar, seamless experience for full productivity,” Burnett said. “Additionally, digital transformation continues to dictate the technology trends. There’s a much stronger need for high-capacity scanners due to an acceleration in the digitization of documents as well as the need for cloud solutions that increase productivity related to workflows.”

One offshoot of the topic is the degree to which employees have returned to the office. Brent Martin, director of marketing for ARLINGTON, points out that many businesses didn’t resume on-premises operations at pre-pandemic levels, as had been expected.

Our aftermarket business hasn’t returned to pre-pandemic levels, and office parking lots aren’t close to full.

– Jim Dotter, Virginia Business Systems

“As companies adapted to working remotely through digital document sharing, these practices have remained in place for most businesses, and print volumes are suffering as a result,” he said.

Indeed, reports of companies requiring workers to return to the office have been greatly exaggerated, according to Jim Dotter, president and CEO of Virginia Business Systems (VBS), the sister company of Edwards Business Systems in Bethlehem, Pennsylvania. This is reflected in the markets that VBS serves.

“Our aftermarket business hasn’t returned to pre-pandemic levels, and office parking lots aren’t close to full,” Dotter added.

Tools that help support remote workflows are especially essential, and one such element that can bolster enterprise content management and document security is the use of RFID readers. John Villegas, vice president of sales for ELATEC Inc., points out RFID readers can ensure the safety and integrity of sensitive data and documents via a single sign-on.

There are plenty of things out there to diversify to, especially if you’re not ready to take the plunge into IT services or other products/services.

– Jason Habbal, Vision Office Systems

“RFID readers provide a secure and convenient way to access documents and data, allowing for quick and easy authentication and authorization of users,” Villegas said. “Plus, they enable advanced tracking capabilities and any unauthorized access to be detected and monitored, giving businesses peace of mind. As the world continues to embrace remote working, RFID readers can provide an easy and secure way to access and manage documents and data.”

Deign to Diversify

The ongoing trend toward reduced print volumes has intensified the call for product diversification among resellers, a movement embraced by Vision Office Systems of Charlotte, North Carolina. Company Vice President Jason Habbal believes industry manufacturers can’t adjust and diversify as quickly as the dealer channel, thus it’s important for the latter to tap into their creativity and resourcefulness in finding adjacencies that dovetail with office needs.

UCaaS and digital signage are two prime opportunities, according to Habbal. “We’ve gone headfirst into digital signage and video walls. I was a little hesitant at first, but it’s become a great revenue source for the company, and our salespeople have done some really cool projects for clients,” he said. “We are also starting to grow our UCaaS business. It’s important to choose the right partner in the diversification process, and I feel that with Cleartouch, Sharp/NEC and Intermedia, we’ve achieved that.

“There are plenty of things out there to diversify to, especially if you’re not ready to take the plunge into IT services or other products/services.”

We’re seeing significant growth in automation into the cloud, increased demand for ECOMMERCE-ENABLED solutions and amplified engagement, with customers in finance, insurance, health care and government looking to streamline their operations through production—an area that’s grown substantially in recent years

– Jim Coriddi, Ricoh USA

The industry’s dealer community has done a yeoman’s job in responding to the needs of customers, and the pandemic added a degree of difficulty and challenged assumptions on what constitutes an offerings catalog. In this respect, notes Mike Marusic, president and CEO of Sharp Imaging and Information Company of America, dealers’ ability to diversify illustrates their willingness to be flexible.

“Dealers are expanding beyond the offering of their longstanding OEM partners, and that’s a good thing for the industry,” Marusic said. “As an OEM, we want our dealers supporting what we offer, but dealers need to be responsive to their customers and work within what they can effectively support. This means branching out beyond the MFP OEM community and building new relationships that help strengthen their support offering for their customers. In turn, the OEMs will see a much stronger dealer community with greater flexibility and reach inside the end-user audience.”

On the subject of diversification, Jim Coriddi—vice president, dealer division for Ricoh USA—believes it offers dealers new routes to revenue and increased profit potential. “We’re seeing significant growth in automation into the cloud, increased demand for ecommerce-enabled solutions and amplified engagement, with customers in finance, insurance, health care and government looking to streamline their operations through production—an area that’s grown substantially in recent years,” he said. “These topline trends present exciting opportunities for dealers to engage in new business and deliver more value.”

How will dealers innovate and continue to offset the lasting effects of service revenues?

– Josh Salkin, EDGE Business Systems

Breaking the Chain

Fortunately for dealers/resellers, manufacturers, end-users and vendors to the industry, the supply chain backlogs have shown signs of alleviating in recent months. Count MTS Office Systems of Anderson, South Carolina, among those dealers who report a sharp rebound from Q2 availability levels among their primary OEMs.

“Customers have been understanding, but a key factor has been communication,” noted Mason Smith, president and CEO. “Most clients are patient to a point, but from a salesperson perspective, you have to do more follow-up with the client. It also impacted the way our dealership purchased equipment. If we can get our hands on something, we’ll purchase it ASAP versus potentially waiting as we did in the past. Because of growth, we’ve made the choice to house more stock of popular models.”

Even with supply chain disruptions diminishing, there are other factors at play that could stymie a full-on placement barrage. Josh Salkin, a partner with EDGE Business Systems just outside of Atlanta, wonders about the economy’s impact.

I don’t see the recruiting issues going away in 2023. That means we have to be as diligent as we’ve always been in trying to find good people in our industry.

– Larry White, Toshiba America Business Solutions

“As we head into 2023, inventory is largely back to normal, but will demand will soften due to economic factors?” he asked. “How will dealers innovate and continue to offset the lasting effects of service revenues?”

Some dealers also see supply chain backlogs as an opportunity to garner net-new clients. Dan Larkin, solutions sales director for St. Cloud, Minnesota-based Marco, notes the ability to promise clients faster product deliveries may be enough to entice customers away from their incumbent vendors.

In that regard, it behooves dealers to be wary of vulnerabilities within their client base. “Adding more points of contact and strengthening relationships with existing clients will be very important in combating client-poaching behavior from aggressive competitors,” Larkin added.

Take advantage of learning opportunities offered by vendors and solutions partners to be the expert your customers are demanding.

– Laura Blackmer, Konica Minolta

Help Wanted

The ability to source and hire quality team members is foremost on many dealers’ minds, including Stargel Office Solutions of Houston. TJ DeBello, vice president of sales, believes the dealer space is taxed by a lack of technically adept prospects.

“The trend is concerning when it comes to the qualified technician pool, where the lack of trade schools makes hiring new recruits difficult,” he noted. “We continue to see hiring to be an obstacle going into 2023.”

Recruiting talent into the industry has long proven to be a difficult proposition, notes Larry White, president and CEO of Toshiba America Business Solutions. Talks of a possible economic downturn won’t move the needle significantly, he notes, as pundits believe that a recession wouldn’t translate into high unemployment figures.

Platforms by companies such as Predictive InSight (Shopblocks) or Keypoint Intelligence (UVERCE) are enabling dealers to spin up digital storefronts complete with financing options.

– Jennie Fisher, GreatAmerica

“I don’t see the recruiting issues going away in 2023. That means we have to be as diligent as we’ve always been in trying to find good people in our industry,” White said. “We’ve partnered with a recruiting specialist we use for our group branches, and we’ve also made it available to dealers. It’s an area we’ll need to concentrate on for the foreseeable future.”

Online Commerce

2022 was a banner year for dealers developing ecommerce pages on their websites, but simplified shopping shouldn’t be the only driving force behind its implementation, notes Laura Blackmer, president of dealer sales for Konica Minolta Business Solutions. Providing education that will enable a dealership to get in on the ground floor of an end-user’s discovery process is essential to conveying value.

“Ecommerce isn’t just about providing a shopping platform. It’s critical to enable customers to do their own online research to learn about your dealership and the products and solutions you offer,” Blackmer said. “In addition, it will be important to determine your strengths and weaknesses as it relates to vertical knowledge and selling. Understanding the business needs and offering true solutions will set you apart from your competition. Take advantage of learning opportunities offered by vendors and solutions partners to be the expert your customers are demanding.”

Jennie Fisher, senior vice president and general manager of the office equipment group at GreatAmerica Financial Services, also views ecommerce as a bold opportunity for dealers to address the trend toward increased purchasing options and prospect education as a result of digital buyer trends. To that end, she notes there’s a wealth of tools at the dealer’s disposal to facilitate a project.

[CPM] provides enhanced security as documents are no longer sitting on a printer unattended, and it also reduces the amount of unnecessary print.

– Clark Bugg, Lexmark

“We expect increased ecommerce adoption as dealers strive to meet modern buyer preferences,” she said. “Platforms by companies such as Predictive InSight (Shopblocks) or Keypoint Intelligence (UVERCE) are enabling dealers to spin up digital storefronts complete with financing options.”

Increasing Clouds

The ongoing migration to the cloud by customers and prospects is a major focal point for Blue Technologies of Cleveland. Lauren Hanna, vice president of sales, notes that as companies drift further away from physical servers, print servers remain an obstacle. She feels it behooves the industry to prepare for an increase in “flavor-of-the-day” solutions.

“We need to make sure to qualify these solutions and the support model that’s intended for them,” Hanna said. “We must make sure our technical team has the right tools and training to support these solutions, too. There are advantages to this migration wave, including adding the ability to remotely deploy machines more efficiently.”

The ability to eliminate dedicated premises-based print servers and employ shared computing power in the cloud will be sought by end-users in the coming year, notes Clark Bugg, director of North America channel sales for Lexmark. That’s why Lexmark’s Cloud Print Management (CPM) is a significant marketing tool for the company, as it allows the end-user to print to the cloud and retrieve only the documents needed at any network printer.

The industry is changing with the introduction of new technologies, the evolving threat landscape and new risks associated with different industries, products and services.

– Preston Woolfolk, DOCUmation

“[CPM] provides enhanced security as documents are no longer sitting on a printer unattended, and it also reduces the amount of unnecessary print,” Bugg notes. “As a matter of fact, we’ve seen customers that implement CPM reduce their pages by 30%.”

Security Guidance

One of the more popular topics that seems to weave in and out of the collective conscience is security, with high-profile attacks of major corporations providing periodic spikes in attention to its significance. As phishing and hacking incidents continue to fester, it’s an opportunity for dealers and resellers to demonstrate how they can help clients and prospects mitigate their risks, according to Elliot Williams, director of product marketing, business imaging for Epson America.

“This is an area where dealers can be more proficient and proactive, not only in security but in pre-emptively articulating how the products they offer are secure in anticipation of potential threats,” he said. “Anticipating any issues that may arise and proactively offering a solution before it happens is another way dealers can gain confidence from their customers.”

Echoing that sentiment is Preston Woolfolk, co-president of DOCUmation in San Antonio. Cybersecurity ranks highly in engagements for both clients and prospects, particularly with the creation of more vulnerability points.

“The industry is changing with the introduction of new technologies, the evolving threat landscape and new risks associated with different industries, products and services,” Woolfolk said.

Inflation is creating pressure on wages. Colorado inflation is running at 15.5%.

– Paul Archer, Automated Business Technologies

Dan Cooper, CEO of Nashville, Tennessee-based Novatech, believes the trend toward increased A4 utilization will be accompanied by a higher emphasis on print security, providing a significant opportunity for dealers that are adept in the full managed service spectrum.

“This will drive enhanced demand for those dealers providing a combined managed print and managed IT offering,” he said. “In addition, the growing trend of managed print and managed IT acquisitions will only increase in 2023, resulting in accelerated pressure for suppliers in these two channels.”

Inflation and Interest Rates

Not surprisingly, economic trends continue to plague businesses. Paul Archer, CEO of Automated Business Technologies in Centennial, Colorado, notes that the downward pressure inflicted by high interest rates and inflation have cut particularly deep into his state’s business community.

“Inflation is creating pressure on wages,” he said. “Colorado inflation is running at 15.5%. We need to increase pay by more than our typical annual increases. Can we pass the payroll expense increases through to customers?”

High interest rates have led to financing/leasing rate fluctuations, which adds a wildcard to pricing for resellers, according to Dean Swenson, president of The Swenson Group in Livermore, California.

RPA is also gaining in popularity as it automates routine back-office processes, freeing up staff to focus on higher-value work.

– Mike Pietrunti, Xerox Corp.

“Leasing companies are forced to raise rates at an unprecedented pace and shorten the time period that the rates on an approval will be honored,” Swenson remarked. “This currently makes, and will continue to make, pricing deals accurately a challenge.”

Digital Transformation

The push toward digital transformation is a significant movement in the office technology sector. Mike Pietrunti, senior vice president, U.S. multi-brand dealer channel for Xerox Corp., says increased app usage and robotic process automation (RPA) will play huge roles in its growth.

“We’ll see more dealers hone in on AI and digital technologies to help customers drive intelligent workflows,” he said. “As a result, we’ll witness increased use of cost-effective apps that help solve critical workflow issues. RPA is also gaining in popularity as it automates routine back-office processes, freeing up staff to focus on higher-value work.”

Bits and Pieces

Another area of increasing significance is packaging professional service offerings around supporting applications integrated in the hardware. Melissa Confalone, vice president of sales for Fraser Advanced Information Systems of West Reading, Pennsylvania, notes that copiers now have an abundance of integrated software applications, and break-fix models don’t cover these items.

“With the considerable consolidation in the industry over the past several years and the increased demand for professional services to support applications, the future for more advanced dealers who offer both types of services and do them well looks bright,” Confalone said. “Those who aren’t offering advanced services such as this to clients will find themselves at a disadvantage.”

How do [OEMs] all survive in a marketplace that’s flat at best?

– Tyson Johns, Pearson-Kelly Technology

Is it possible that the office technology industry has a glut of manufacturers at its disposal? There are dealers, including Pearson-Kelly Technology (PKT) of Springfield, Missouri, that question the long-term viability in having 10-plus hardware options. Given the market is already pressed from a profitability standpoint, Tyson Johns, director of finance for PKT, is skeptical about the industry supporting such a crowded field in the aftermath of the pandemic and supply chain issues.

“How do [OEMs] all survive in a marketplace that’s flat at best?” he wondered. “My feeling is they don’t, and either they will be bought up for R&D, or they will go away as the copier segment was a small piece of their overall output, anyway. This contracts the differentiators amongst dealers, especially if one of these OEMs use to be a top three.”