Last month, BLI analysts attended Ricoh’s 2015 dealer show in Las Vegas. Living up to the event’s theme of Collaborate.Succeed, Ricoh senior executives were very open with dealers, going so far as to having an open question and answer forum during the general session. It shows how far Ricoh has come in the last few years in improving its relationship with dealers, who now make up over 37 percent of the company’s total sales.
Taking a similar tack as a number of its competitors, Ricoh now has 436 dealers, which is down about half from nearly 900 seven to eight years ago. And despite having the same number of dealers as last year, dealer attendance at last month’s show increased by about 10 percent. “Because we’re emphasizing the quality of our dealers over quantity, we’re able to have more employees from each of our dealerships here in attendance,” said Ricoh Vice President of Dealer Sales Jim Coriddi. “By closing the gap between dealer principals and their employees that sell product, decisions can be made as to where they should further invest without the details getting lost in translation.”
Nearly half of Ricoh’s dealers carry only Ricoh’s line and Ricoh is making a push for more such dedicated dealers. “We’re in a more open position to invest more with our dedicated dealers in areas such as pilot programs, and sales training,” Coriddi said, adding that Ricoh has a dealer-by-dealer business plan with its dedicated dealers. And with an expansive product line from the low end to high end, and armed with BLI’s 2015 A3 MFP Line of the Year award, the company has a strong message to sell to its strong dealer base. According to Coriddi, Ricoh has experienced almost double-digit compound annual growth on equipment over the last three or four years with its dealers. Ricoh’s dealer sales in production grew 19 percent year over year, and the company is now the number 1 overall market share holder in the color production market, at 25 percent. Ricoh dealer sales in A3 grew 16 percent year over year, 20 percent of which was for color products.
And while Ricoh’s direct sales growth was not as robust as that of its dealers, global sales still grew 3 percent year over year, and operating income was up 10 percent, despite a slowdown from sales in Europe. For Ricoh US, hardware grew by 4 percent, while managed services and professional services grew by 5 percent, and 15 percent, respectively, with growth in the aftermarket relatively flat. Ricoh continues to have the largest direct sales footprint in the US.
CHAMPS Comes to the Forefront
Originally introduced at Ricoh’s 2011 dealer meeting as a means to help dealers transform their business model to a services-led approach, CHAMPS experienced a number of hiccups in the program’s early years. But according to Coriddi, dealers’ early concerns about working so closely with direct sales on potential sales, only to have the direct branch swoop in to seal the deal, have long been resolved.
“On the Ricoh level, organizationally we had to teach our people that they don’t work for direct, but instead are a central resource, and at the same time, those central resources had to learn how best to interact with our dealers,” Coriddi said. “Now, that talk we’ve been talking about has become real.” As Coriddi explained, per Ricoh’s rules of engagement, once a dealer signs up for the Champs initiatives on a prospective customer, that customer is on record and belongs to that dealer.
With trust issues between the direct and dealer channels put to bed, Ricoh hit the “fast-forward button” on the CHAMPS program at last year’s dealer meeting, and has kept the “pedal to the metal” since. “The real objection we experience now in regard to the CHAMPS offering is not lack of trust, but rather, the dealers willing to bring in an outside entity in an area that’s not considered their core competency, which can put some level of risk on their customers,” said Coriddi.
Clearly more and more of Ricoh’s dealers are taking advantage of the program and reaping the benefits; over 170 dealers have completed a CHAMPS certification. In addition, Ricoh personnel and dealers are now collaborating on five new CHAMPS opportunities per day, and Ricoh expects to reach 330 total opportunities by the end of this quarter, up from 107 and 284 in fourth quarter 2013 and fourth quarter 2014, respectively. Moreover, the average sale increase—just for services, not software or equipment—when bringing CHAMPS into the fold on selling opportunities has increased from $2,676 per transaction in the second quarter of 2014 to $6,545 per transaction in the fourth quarter of 2014; the average sale per transaction is projected to reach $12,500 by the end of this quarter.
mindSHIFT Over Matter
With the small- to mid-size business IT services market estimated to be more than $40 billion by 2016, Ricoh also announced the rolling out of a new CHAMPS offering with mindSHIFT, the IT services firm Ricoh acquired last February. “We could never develop this level of expertise in IT services organically,” said Martin Brodigan, chairman and CEO of Ricoh Americas. “This acquisition was really about acquiring the knowledge and expertise we need to move services forward in the IT services market.”
mindSHIFT has been a provider of IT services for small- to mid-size businesses for the past 15 years, and currently supports over 155,000 end users. The company’s services include an IT help desk, server management, cloud-powered email archiving and hosted exchange email. By bringing mindSHIFT into the fold last year, Ricoh direct sales branches generated $170 million in IT services business this past year. And now, these IT services offerings are being rolled out to Ricoh’s dealers.
As Coriddi explained, for the first six to seven months following the acquisition, mindSHIFT was transitioning into Ricoh, and figuring out how Ricoh direct works and meshes together. The dealer program being rolled out now was put together over the last three to four months. And with the current momentum the CHAMPS program is experiencing, Ricoh hopes that 30 to 40 percent of its dealer base gets certified for the mindSHIFT offering fairly quickly.
Product Expo Highlights
Highlights of the product expo included a number of launches in the production print area, which continues to be a high-growth area for Ricoh and others; A3 and A4 offerings; the unveiling of the upcoming Smart Device Connector for mobile users; and plans to update its BLI award-wining Smart Operation Panel on their next-generation devices. The latest in Ricoh’s vertical market offerings were also highlighted on the show floor. Following are details:
· Featuring rated speeds of 130 ppm and 110 ppm, respectively, the Ricoh Pro C9110 and C9100 support paper weight up to 400 gsm from any of the paper trays. According to Ricoh Product Manager Fred Morrone, the “guts” of the machine have been moved up to a separate compartment above the mainframe, creating a very large paper path inside the machine to allow heavier paper stocks to run through the engine more easily. In addition, all the trays, which support paper up to 13” x 19”, are vacuum-fed, and feature three belts, allowing paper to be picked up and moved through the machine straight to eliminate curling that can be found on machines with just one belt. The fuser features five lamps, so there is no reduction in speed, even for paper stock above 350 gsm. A built-in cooling system features eight fans, allowing paper to output at room temperature. The devices also support a maximum paper capacity of 17,600 sheets. Up to two stackers can be attached to the device at the same time. The device is currently undergoing beta testing at two different locations in preparation for official launch in the April/May timeframe.
· With a rated speed of 90 ppm, the Ricoh Pro C7110 replaces the C751/C651, and according to Morrone, is blowing away the initial sales forecast numbers. The device supports paper weights up to 360 gsm in both simplex and duplex modes. The “X” version features a fifth station for white or clear toner. The device also features 12 key components that are customer-replaceable, including the fuser and developer units, which are all clearly labeled inside of the machine. As with the C9110 and C9100, the vacuum-fed drawers feature the three belts to help eliminate curling issues. Also of note, the media library for the machine supports 1,000 media types, with 99 attributes programmable for each type, including fuser temperature, transfer current, etc. This goes a long way in making the machine compatible with most any paper types available. The device also supports a maximum paper capacity of 16,200 sheets.
· A printer-only version of the Ricoh Pro 8100 Series was also announced, joining the Pro 8120/8110/8100 MFP versions. Of note with these machines, as well as with the Pro C9110/9100 and Pro C7110 Series, is the new interface box that allows these engines to communicate with third-party finishers, bringing inline high-end production finishers that were previously only available as near-line or offline options. The first third-party finisher to work with the new interface box is the C.P. Bourg Booklet Maker, which features staples on a wire, to make them more reliable when used for thicker booklets. According to Ricoh Product Manager David Rolon, this moves Ricoh more into the conversation with commercial print shops that may already have an investment in Heidelberg or C.P. Bourg, for example. The new interface box also eliminates lag time between jobs that was experienced in the past. As Rolon explained, in the past if an operator would send a print job with stapling, with the next job queued up without stapling, a machine would need to power down after running the stapled job and then power back up before being able to run the second non-stapled job in order to reset itself.
· A media identification unit will now be available for Ricoh’s production engines. When a piece of paper is placed in this device, which sits on top of the units, it will measure weight, as well as type of paper, and then scan the paper catalog to come up with the best match in percent probabilities of 90 percent, 80 percent, etc.
· Ricoh is not yet ready to enter the 3D printing space. According to Brodigan, 3D printing will require different people with different skill sets outside of the current core of hardware, and the company won’t make that leap until it’s sure it will be a revenue-positive and business-positive step. “While 3D printing is sexy, we really want to understand how we can help our direct and dealers make money and not complicate their current business strategies,” said Brodigan.
· Joining the MP 5054 and MP 4054, the MP 6054 will feature a rated speed of 60 ppm. The device offers a standard duplex single-pass feeder, which is an upgrade from the previous generation.
· The new SP 4510SF and SP 4510DN, as well as the MP 401 and SP 4520, are Ricoh’s latest A4 offerings. All four machines are nearly identical, outside of the fact that the 4510DN and 4520 are the printer-only versions, whereas the 4510SF and MP 401 are MFPs. In addition, the components for the MP 401 and SP 4520 are designed for use in the cpp space in which service contracts are the norm, whereas the components for the SP 4510SF and SP 4510DN will be available in the retail space. With rated speeds of 42 ppm, the new devices feature a 4.3-inch color touch panel that provides the same user experience found in Ricoh’s A3 line. Legal-size paper is supported through the document feeder.
· The upcoming Smart Device Connector app will allow mobile users to control Ricoh MFPs from their smart device. Using NFC technology, end-users will be able to queue up all of their job settings via their mobile device, and then release their jobs at the device when the machine is free. Users will also be able to scan to the device and email using the address book of their smart device, versus the address book of the MFP. It will also offer integration with projectors and Ricoh’s interactive white boards, to allow users to transfer an image over to a whiteboard, for example. Users will also be able to program their most frequently used MFP settings onto their smart phones.
· A new Smart Operation Panel is in the works, and will feature twice as much memory and a faster processor than the current panel. The full Android version will also open up more app development opportunities for Ricoh. Apps will include a photo gallery widget, a Vine app, a stop job widget, as well as creation of job tickets for end users at the control panel.
· In terms of verticals, a software-based solution for the legal market was showcased, in which three legal-specific workflows have been created as new plug-ins for GlobalScan: scanning to document management system via Worldox, Open Text, or iManage, three big players in the legal space; bates stamping; and court filing. Because every court has different file size standards, Ricoh GlobalScan has created an interface in GlobalScan to upload CSV files or configure an administrative tool that links the name of a court to their file size standards. In terms of cost recovery, Ricoh now offers integration with PCS director for GlobalScan in order to create a more cohesive end-user experience.
· An Education MFP is also in the works, while an education software package is currently available for Ricoh devices that support the ICE platform. Ricoh has partnered with Blackboard, which offers Blackboard Learn, a learning management system predominantly in higher education, but also in K-12. A Blackboard connector is built into the Ricoh device so that anything scanned from the device will be found in the scan to learn folder on the device. From there, users will have up to two weeks to print any files stored in the scan to learn folder using their personal PIN. Commonly used connectors such as scan to email, Dropbox, Evernote and Office 365 are also supported via Ricoh’s education software package.
· A more compact version of Ricoh’s Healthcare MFP is also in development.