Stores Get More Ink
Consumers
looking to buy ink, toner and other printing supplies–the most
profitable part of the printer business–are increasingly turning to
retailers’ own brands, according to a study released this
week.Technology research firm InfoTrends says that retailers like
Staples and Office Depot are grabbing a growing chunk of the $100
billion imaging supply market by selling in-house brands of ink, toner
and other supplies. The losers, for now, are third-party companies like
Franklin, Tenn.-based Nu-kote. But eventually the trend may bite into
the bottom line of printing powerhouses like Hewlett-Packard , Canon
and Lexmark.Right now, the printing giants own 84% of the print
supplies market, InfoTrends says. The remainder is split between
retailers that sell their own brands and the Nu-kotes of the world.
Currently, retailers own about 60% of that market, and they’re going to
get more, says InfoTrends researcher John Shane.Shane says he expects
stores’ brand sales to grow at a 40% compounded annual growth rate
through 2009, while aftermarket sales will grow at only a 1% clip.
Print giants like Hewlett-Packard will grow at an 8% rate, he says.But
without a serious investment in advertising and promotion, that growth
spurt “will probably slow down,” since “most large stores out there are
already selling their own ink,” Shane says. There is one notable
exception. “ Wal-Mart is the wild card. It’s not clear if they will
pursue it,” he says.Still, printer manufacturers aren’t totally safe
from the shift. “Store brands are definitely whittling away from OEM
[original equipment manufacturer] market share,” says Shane. But
companies like Seiko Epson and Canon have more to lose. HP, Dell and
Lexmark bundle their ink and toner cartridges with printer
heads–which are protected under strict intellectual property
rules–while Epson’s and Canon’s printer heads are sold separately.