Deborah Hawkins, Director of Keypoint Intelligence’s Office Group, outlines key findings from the company’s recent survey of 200+ resellers, including readers of PrintIT Reseller
Office equipment vendors are optimistic, flexible and ready to sell into new environments, according to data from our new channel survey. While the COVID-19 crisis is still lingering, office equipment dealers and IT resellers are enthusiastically adopting new business practices, products and approaches to selling.
Our survey, conducted online in March 2021, captured responses from 87 office equipment dealers whose primary business is selling office equipment and 117 IT resellers (including VARs and MSPs) whose main business is IT. All respondents came from either the UK or Germany and were decision-makers within their organisations, all of which sell A3 and/or A4 devices and also provide technical service.
Despite the pandemic and the effect this has had and continues to have on our industry, many resellers reported relatively strong and stable financials. The group reported an average 1.9% growth and a 16.4% margin compared to a similar survey conducted in 2019, where average growth came in at 7% and margin at 16.1%. So profit margin is holding up whilst growth is slowing.
Acquisitions and diversification
We were happy to see that the channel as a whole has a positive view of the future. Acquisition behaviour amongst the channel is relatively active, with 41% of the resellers we surveyed stating that they are likely to acquire in the next 12 months. In addition, the channel report strong investment in e-commerce to support in particular remote workers; 67% stated that they have already invested in an eCom store and 27% are considering investing right now.
They have also jumped into a variety of new ‘smart workplace’ product areas, or are considering doing so. Most have already been on a path to diversification and have added document automation, IT infrastructure services, conference communication systems, smart whiteboards and meeting room software to their portfolios. Similarly, the pandemic drove many channel players to add items like IT services (60%) and cloud solutions (47%) to their repertoires.
The adoption of new products and services reflects the flexibility that is being demonstrated by the office equipment and IT channels. We also saw that 66% of office equipment dealers and 62% of IT resellers have added or dropped a brand of print device sold in the last 12 months. Whether this is because they were seeking higher profit margins, better dealer programs or a more reliable availability of supplies, it indicates that resellers are willing to make a switch to better themselves.
The channel’s flexibility is also reflected in its accommodation of new customer technology needs. For example, with many employers continuing to allow or require staff to work from home (at least some of the time), the demand for A4 print devices has dramatically increased. According to the resellers surveyed, the kinds of A4 products seeing the most demand for home-based working are A4 inkjet MFPs (64%) and A4 laser MFPs (53%). The channel is fulfilling these requests, even if it might mean less revenue and profit for now.
Customer satisfaction is also being achieved through a recognition of and attention to the features that customers value most. The survey revealed, for instance, that resellers view reliability (52%), security (52%) and ease of maintenance (50%) as most important for work-from-home users. It makes perfect sense that the channel is looking for manufacturers that provide technology that is most likely to keep the customer happy.
In addition to selling technology for work- from-home arrangements, today’s resellers are capitalising on new opportunities associated with office locations. Indeed, offices are looking somewhat different for many organisations, with fewer people on-site at a given time (often due to work-from- home capability) and in some cases continued requirements for masking and social distancing. Plus, employees are more likely to be using cloud services and video conferencing to handle information and communicate compared to pre- COVID.
Given these dynamics, companies may no longer require the same quantity and kinds of print devices they relied on before. In fact, the channel indicates that 53% of customers are actively planning changes to their print environment, most likely a shift to A4 colour and a decrease in A3 devices, with many considering a shift to inkjet technology. While these changes may be seen as a threat to some vendors’ business, they also give them a chance to reinforce their commitment to serving evolving customer needs – helping cement loyalty and future business with the customer.
Top three ways customers will change their print environments, according to the channel
46% Expect a shift to A4 colour Expect to decrease A3
41% devices but increase A4 Are considering shifting to
33% inkjet technology
Source: The State of the Office Equipment and IT Reseller Channel in 2021: WE. Results (Keypoint Intelligence)
Beyond opportunities for selling A4 products, MPS contracts more aligned with current needs, and cloud services that are compatible with customer print devices (or even replace the need for them), dealers and IT resellers see other promising areas of document technology for future offices. For example, in terms of MFP technology they believe that remote service capabilities (67%), devices capable of self-healing and self-maintenance (63%), and products supporting touch-free operation via a smartphone app (62%) will all be crucial in office environments.
Despite the unusual challenges of the last 15 months, office equipment dealers and IT resellers offering print technology are ready to do what they’ve always done: cater to the customer. This means embracing new work forms, work-from- home and hybrid office needs, taking on new brands and technologies, and giving customers what they want as well as what they didn’t know they could have. While some of the shifts being seen in print infrastructures may be concerning to the channel from a financial perspective, they also provide an opportunity for players to differentiate themselves and devise new and more sustainable business models.