Prolog: Friday’s with Frank
On Friday’s with Frank, Art Post keeps it simple.
No drama. Just numbers and patterns. IT services and production print now make up 34 percent of dealer revenue. A3 still carries margin, but the foundation feels thinner. Millennials shifted away from print quietly. Gen Z never built the habit.
No one declares print dead. No one predicts a rebound.
The message is steadier than that. The channel is not collapsing. It is changing shape. And once you see the shift, it is difficult to pretend it is temporary.
There is a moment in every industry when the data stops being seasonal and starts being structural.
The recent dealer survey showing IT services and production print accounting for 34 percent of independent dealer revenue is not a blip. It is not a post-pandemic adjustment. It is not a soft quarter. It is a directional shift. And if you sit with that number long enough, it becomes difficult to pretend otherwise.
Print is not collapsing. It is thinning.
That distinction matters.
For decades, the independent dealer model was anchored to A3. Larger devices, larger margins, predictable click revenue, long leases. It was a tidy machine. Sales drove placements. Placements drove service. Service drove annuities. The flywheel turned.
Now the flywheel is still turning, but the mass has changed. Volume per device is drifting downward. Maintenance agreements are lighter. Cost per click revenue is shrinking quietly, not catastrophically, but steadily. And steady decline is harder to fight than a sudden drop because it invites denial.
A3 is becoming a defensive asset.
It still carries margin. It still makes sense in architecture, engineering, construction. It still has gravitational pull in environments where print is workflow, not convenience. But it is no longer a growth engine. It is a hold position. That is a different posture entirely.
The more telling force at work is behavioral.
Millennials did not hate printers. They simply deprioritized them. Scan, store, share replaced print, copy, file. It happened without rebellion. There were no memos announcing the end of paper dependency. The behavior just shifted.
Gen Z and Gen Alpha are not even shifting. They never arrived with print habits to unlearn. They operate natively in digital spaces where permanence is cloud-based and documents are fluid. They do not walk to a device to complete a task. They move through applications.
That is not a generational preference. It is a cognitive baseline.
Which leaves dealers with a narrow but real opportunity window.
Legacy documents still exist. Municipal archives still sit in cabinets. Engineering firms still hold decades of plans on paper. Hospitals still carry historical records that need digitization. Wide format scanners and document conversion projects will generate revenue in the near term. But that revenue is migratory. It moves paper into digital form and then eliminates the need to print it again.
It is a bridge business. Bridges are useful. They are not destinations.
Production print remains a stronger story. Specialized output, packaging, labels, marketing materials, short run runs that cannot be replicated by email or screens. That segment has logic. It has defensibility. It requires expertise and disciplined management. Not every dealer is built for it, but those who are may find stability there.
The more interesting shift, though, is not about hardware at all.
IT services are no longer an adjacent line. They are becoming the stabilizer. Managed services, network support, security, cloud oversight. These offerings attach to environments that are growing, not shrinking. They respond to digital dependency instead of resisting it.
Some dealers still treat IT as a bolt-on. A hedge. Something to mention in the brochure. That approach worked when clicks carried the business. It works less well now.
There is also a psychological component here that rarely gets discussed openly.
Dealers built their identity around print expertise. Around uptime. Around machine mastery. Around service response. It is difficult to pivot emotionally from a product that shaped your reputation. There is pride in knowing every inch of an engine. There is comfort in the predictability of a lease cycle.
But markets do not negotiate with nostalgia.
It is tempting to look at OEM earnings calls, see declines, and hope for a rebound. It is tempting to double down on A4 placements or adjust compensation plans to squeeze a few more placements per rep. It is tempting to say print is not dead and leave it at that.
Print is not dead. That part is true. But it is not expanding either. That part deserves equal attention.
Dealers who treat this moment as cyclical will feel increasing pressure. Dealers who treat it as structural will reorganize around durability. That likely means leaning harder into service contracts tied to digital infrastructure. It likely means developing production capabilities where they make sense. It certainly means preparing sales teams to talk less about speeds and feeds and more about operational resilience.
There is no dramatic collapse underway. No cliff edge. The transformation is quieter than that. It is a gradual rebalancing of revenue composition. Those are the shifts that reward early clarity.
The channel still has advantages. Local presence. Service DNA. Financing experience. Long-term client relationships. Those assets translate well into a robotics future, into managed services expansion, into embodied Ai deployments in office environments. The foundation is there. But foundations do not build structures on their own.
If there is a dividing line emerging, it is this: some dealers are defending a shrinking core, others are repositioning around a broader services model anchored in recurring digital infrastructure revenue.
That repositioning is not glamorous. It requires retraining. It requires admitting some sacred cows are no longer sacred. It requires, perhaps most difficult of all, acknowledging that A3 is not the future centerpiece.
And yet, that acknowledgment is liberating. Because once you stop pretending the old engine will regain full speed, you can design a new one without resentment.
The data is whispering in plain sight.
It will be disruptive. Less so for those who chooses to listen.
No comments:
Post a Comment