Ringing in the New Year with a Look at Trends to Watch in 2019

Nick Capparelli, LEAF Commercial Capital

Easily, the most difficult days of the year to find motivation and energy are the first few trips to the office following the long holiday season.

Fear not, the gift wrap, party eyeglasses and sugar cookies may be a distant memory, but we’ve assembled a cast of industry heavyweights to shake off the cobwebs and get you back into industry mode. As you finally finish answering emails and setting up appointments for the first full week of January, we’ll help you get back up to lap speed with an overview of some of the major talking points that will shape 2019 and beyond in the office technology sector.

Product line expansion is on the radar for many dealers as technology and office product digital convergence continues to accelerate, says Nick Capparelli, managing director for LEAF Commercial Capital. He notes that office equipment dealers are either hiring or entering into joint ventures with technology teams to expand their technology prowess.

Tailored Solutions

“Beyond just expanding and adapting existing services, the most successful providers will apply their industry experience to developing tailored, integrated solutions that address a wider range of needs across the enterprise,” Capparelli said. “Technology IQ will be a differentiator, not only with customers but also in the dealer’s back office. Streamlining processes and increasing use of technology APIs will promote more seamless communication with customers and third-party service providers. This will result in enhanced service and greater perceived value.”

It stands to reason that securing access to the necessary capital, in light of expanded acquisition activity, is critical for success. Capparelli believes it’s important to engage a primary, industry-experienced source for most or all of these capital needs – inventory, hiring, marketing and new locations.

“Otherwise, you risk getting a confusing patchwork of various capital sources that may or may not understand the office products industry,” he said. “This can result in increased costs, missed opportunities and even harm to a dealer’s reputation. As office products businesses consolidate, some equipment financing companies have already stepped up to meet this need for an integrated, value-added source of capital and expertise, a trend which should continue.”

Sammy Kinlaw, Lexmark

One of the growing trends is the cross-pollination of partners, notes Sammy Kinlaw, vice president, worldwide channel and OEM sales for Lexmark. Partners who once only sold print are moving into the Internet of Things (IoT) world, while others who historically sold PCs are now picking up print. Kinlaw notes that as markets decline and revenues shrink, Lexmark partners will continue to look for new ways to achieve revenue goals and margins.

“The partner community is smart and efficient,” he said. “The players in this business today are consistently reinventing themselves. Not all will make it, but most will. Based on the distributor events I’ve recently attended, they are open-minded about growing print and the Lexmark brand. I’m predicting growth for Lexmark in 2019.”

Skirting A3 Reliance

Darren Metz, Novatech CEO

One trend that is continuing to have ramifications for many dealers is the ongoing decline of the selling-price-per-unit of the office copier, says Darren Metz, CEO of Nashville, TN-based Novatech. Metz feels it is paramount for dealers to change their revenue mix so that A3 represents less than 50 percent of the take.

“The A3 MFPs will always be an important part of any MPS play, but I think a lot of dealers talk about MPS, managed IT,” he said. “Look at their numbers; I see a lot of them in the acquisition business, and with a lot of the dealers we’re looking at, 90 percent of their revenue is still coming from the office copier. They say they’re into managed print, but they’re really doing old school copier leasing. Some have been successful at getting away from it, but many of those who cling to that as their sole revenue stream are looking at flat to declining revenues.”

Going Off-Click

Mike Marusic, Sharp

Mike Marusic, president and CEO of Sharp Imaging and Information Company of America (SIICA), predicts that 2019 will see dealers pursuing other elements of a company’s information technology rather than sticking to the traditional model of managing clicks and service rates.

“Dealers who are not yet into managed network services should quickly study how they can enter this market, as it can serve as a portal to other parts of their customers’ business,” he said. “It is the IT version of managing clicks and service support. Overall, as dealers adjust their model and think of new ways to serve their customers, this will allow them to interact more with other technologies, such as laptops, routers and other equipment that connect with MFPs.”

Erik Cagle
About the Author
Erik Cagle is the editorial director of ENX Magazine. He is an author, writer and editor who spent 18 years covering the commercial printing industry.