The big food fight

Office National belatedly jumped onto the print services bandwagon with PrintSoft, which it hosts for its members. A reseller attaches a USB key to a customer’s network and downloads data from every network-attached printer, then calculates the total cost of consumables, analyses which machines are over- or underutilised, and sets up automatic flags to email them when toner is running low.

The aim is to move the customer to a cents per copy model and take away the stress of having to order toner or send machines in for servicing.

ON has just finished adding the PrintSoft curriculum to its sales academy, which recruits, trains and inducts sales staff for its members, as well as retraining existing employees. Six members signed up during the pilot phase. Boath has high hopes for the program but has not yet set targets.

He sees several trends greasing the wheels of his members. Monitors are dropping in price, tempting offices to upgrade in size or replace power- and space-hungry CRTs.

One more driver is the affordability of MFPs, which is driving out mono inkjet and (to a lesser degree) low-end laser printers. Some manufacturers have seen falls of the latter of up to 20 percent year on year.

IT managers are now recommending against centralised network printers for the personal desktop machine, said Boath. “These things are so cheap they are almost like a desk accessory. Everyone can have their own.”

Another trend is the falling cost of colour laser, which is prompting many SMBs to refresh their old monos. Then there is the category which Boath calls office accessories, which covers wireless peripherals and USB-connected novelties, such as coffee-mug warmers, fans and lights. “People are upgrading what they put on their desk, it’s like a status symbol.”

These trends in printing show how far the concept of “Green IT” has to go. The ability to print on both pages, known as duplex, is reserved for high-end printers and MFPs – there are very few entry-level machines with the capability.

And the distributed printing model increases the number of machines, with their extra electricity demand and consumables, decreasing efficiency and increasing waste.

Boath said the best environmentally minded push from the print manufacturers is recycled cartridges and toners; a new tactic for some but hardly news to the industry.

The e-commerce platform will eventually replace the foundation stone of office supplies; the humble catalogue. Boath said the old-fashioned glossy is still one of ON’s most efficient selling tools – a quick and easy way to glance through a wide range of low-value items and check prices.
But its days are numbered. ON is pushing its members to mine customer databases for email marketing campaigns using electronic flyers that also have pages that can be turned and torn off for future reference.

The trend to online shopping is simply a result of generational change more than anything else.

“If you have a look at our target market, they are female and in the junior administration-cum-reception roles. The Y Generation is starting to fill these roles and they shop almost exclusively online,” said Boath.

Boath looks to Corporate Express as a benchmark, which claims that 70 percent of turnover is through the web. ON is only doing 25 percent, a figure the new e-commerce platform should boost considerably. The more business done electronically, the more costs are saved.

“It is so much more efficient for a customer to be ordering online, and for that order to come automatically through to our member and generate a picking slip in a warehouse. That’s a huge amount of cost to take out of the business in terms of order capture, order entry and order fulfilment.”

ON is carefully pursuing expansion plans through its NZ counterpart, Office Products Depot, for which it holds the master licence agreement in Australia.

Boath said that the only way to grow the co-op beyond its annual rate of 10 new members is to build a second brand, but without impeding on the business of current owners.

The Office National brand itself is similarly licensed out to a South African co-op. ON itself is 100 percent owned by its membership.

Boath is positive about the future, especially the coming stoush with Corporate Express. Only a year into his term at ON, he was previously in the food and beverage franchise industry with multinational brands such as Danone, National Foods, Dairy Farmers and Cadbury Schweppes.

Food and beverage is a much more mature market where the Coles-Woolworths duopoly calls the shots, and there is with little room for new ideas.

IT by contrast is very dynamic. “There is a lot more opportunity to have an impact on the outcome, which is really refreshing.

“It’s a market that’s a hell of a lot more prone to innovation and within categories there are huge swings which create opportunities, whether that be what’s happening with printers or the move to colour laser, or even just all of those computer accessories.”

If there are any parallels between office supplies and food and beverage, Corporate Express and Office National are heading for one big food fight.