The pull economy is gaining momentum across many industries. When will the office technology channel be impacted?
Let’s go back in time to when copying and print usage was growing. Everybody was printing everything. The information one read was on paper; back then things just clicked away. Customers leased hardware and paid for service by the click. Print manufacturers sold their A3 through distribution channels made up of independent dealers; some had direct operations as well. A4, for the most part, didn’t exist except for segment one (of course) and segment one produced around 10 pages a minute.
Back in this time, A3 copier manufacturers, for the most part, competed strictly against each other. All manufacturers had the same equipment, and most of its distribution partners sold, serviced and supported it in the same manner.
Channel sales pushed the equipment to the end users. The push economy was good to the channel. Local independent dealers competed for market share. Both dealers and direct operations set the stage for how their customers would both acquire the equipment and service it. For the most part, sellers decided the deal structure and pushed the process to the buyer.
When we look back, we would all conclude one important thing. The end users hardly ever decided on the equipment; the equipment was pushed to them. Equipment was sold to the end users using an in-person sales force, which pushed the most beneficial, self-serving program to the end user. We always sold the highest cost equipment and program we could—that’s what we were compensated to do.
So, how will the past carry to the future as print equipment moves more and more to A4, and even the A3 will reduce in cost and require nowhere near the service intensity of its past? Less service intensive and lower cost, with lower demand or need for products equals an enormous shift from the way things are to the way things will be. Buyers will have more choices to acquire, and the equipment acquisition complexities of the past will disappear.
I recently heard someone say that the office technology channel would not be disrupted by the current players. It would only be disrupted by others outside who eliminate the need for the equipment itself. OK, that is one day. I don’t intend to begin a paperless argument; those discussions are distractions to real threats. I will say this: the channel will be disrupted way before that. The service annuity will continue declining in value, and the end users will gravitate to the pull-economy. These two dynamics will cause pain for some in the channel and reward others who prepared. Leaders of the channel can be the disrupters or can be the disrupted. The challenge will be the time to decide to become the disruptor, and that time is running out.
Today more than ever, the office technology channel must prepare and extract as much profit from the current circumstances as possible. Truly understanding your profit potential takes data, not hype or delusional accounting methods. To prosper in the future, we must capitalize on today’s circumstances and take nothing for granted.
