Since joining The Cannata Report five years ago as editor-in-chief, I have loyally adhered to the company line that traditional office technology dealers must expand into production print as well as industrial print to offset the continued decline of office print volumes. Now, with the COVID-19 pandemic accelerating this decline, I have become more enthusiastic about the possibilities of production print.
The Survey Says
Previously, my lukewarm enthusiasm for production print was tempered by the numbers—as in the number of dealers who open and click through our original digital content about this product segment.
Still, traditional office technology dealers are not oblivious to production print. The Cannata Report's 34th Annual Dealer Survey conducted in 2019, found that 49% of dealers sell production print devices. Most dealers who sell production print represent either Canon (73% of Canon dealers sell production print), Konica Minolta (74% of Konica Minolta dealers sell production print), or Ricoh (66% of Ricoh dealers sell production print). Those numbers are not surprising as each of those three OEMs have strong production print lines and some of the largest dealers in the country carrying their products.
The survey also found that 38% of Toshiba dealers, 23% of Kyocera dealers, and 21% of Sharp dealers sell production print. Most dealers representing those OEMs are multi-line dealers and also carry products from Canon, Konica Minolta or Ricoh, and are their likely provider of production print equipment.
Optimistic on the Rise
When we asked dealers how optimistic they were about production print, the average percentage of optimism among dealers was 63%, up 2% from the previous year. Fully 20% said they were pessimistic, down from 23% last year. Seventeen percent of dealers who sell production print did not respond to the question.
There was a significant disparity between the optimism of dealers representing Canon, Konica Minolta, and Ricoh compared to those whose primary supplier was Kyocera, Sharp, or Toshiba. Here, 75% of dealers representing Canon, Konica Minolta, and Ricoh were optimistic, while only 51% of dealers representing the other three OEMs were optimistic. Driving that percentage down are Sharp (43%) and Toshiba (45%) dealers. Meanwhile, Kyocera dealers' optimism was trending upwards with 65% optimistic compared to 55% last year. That optimism may be inspired by Kyocera's entry into the production print space in 2019.
To Whom It May Concern
Asked to identify their biggest concerns from a list of 10 items, including "other," (dealers could list an unlimited number of concerns), we discovered that 15% (down from 22% last year) of Canon, Konica, and Ricoh dealers identified succeeding in production print as a concern compared to 12% (down from 15% last year) of dealers whose primary line was either Kyocera, Sharp, or Toshiba. This is not a huge gap, but still reflects the sentiments of those with easy access to a production print line and those without. Note that these percentages encompass all dealers who identified succeeding in production print as a concern regardless of where they positioned it on their list of concerns. Only 0.5% of dealers surveyed identified succeeding in production print as their number one concern.
Greatest Growth Opportunities
Since 2015, The Cannata Report has asked dealers to identify up to four growth opportunities from the following: digital signage, document management/ECM, MPS, MNS, production print/wide format/industrial print, security/cybersecurity, and other.
The five most identified growth opportunities in last year's survey were MPS (57%), MNS (48%), production print (40%), document management/ECM (40%), and security/cybersecurity (34%).
Production print continues to rank in single and low double digits as dealers' #1 growth opportunity. Dealers representing Canon (14%), Ricoh (10%), and Kyocera (10%) identified production print as their top growth opportunity. We surmise that Kyocera's announcement that it was entering the production space helped push Kyocera into the double digits, even though it is only a 1% increase from last year. The most notable decrease was from Toshiba dealers where 13% ranked production print as their top growth opportunity in our 2018 Survey, while only 4% selected it in 2019.
A Wake-Up Call
Returns for our 35th Annual Dealer Survey are just now starting to come in. The results will be published in the fall. It will be interesting to see if the current crisis impacts dealer concerns about succeeding in production print and if more dealers view production print as a growth opportunity.
If they are paying attention to what is happening to print in the office during the COVID-19 pandemic, they should be strategizing about what they can do to make up for that loss of pages in the office. The market research firm Keypoint Intelligence predicts losses of office print of 30% or 148 billion pages in 2020. Next year it estimates 108 billion pages will be lost. Those dire predictions should serve as a wake-up call for dealers not currently selling production print as well as those that do.
Indeed, we expect more dealers will be open to diversifying into production print or more aggressively sell production print equipment and software as they accept the reality that traditional office print volumes will never return to pre-pandemic levels.