Toshiba Poised to Take More Market Share in 2016

Key Takeaways from the Company’s Dealer and End-User Conference


Product Expo at Toshiba Customer Event 2016

Last week, BLI attended Toshiba’s 2016 Dealer and End-User Conference in Las Vegas, and found a company that continues to solidify its relationship with its dealers, and poised to take more market share from some of the bigger players in the industry.

Toshiba has run their annual conference as a joint dealer/end-user event for several years now, and according to Bill Melo Chief Marketing Officer for Toshiba America Business Solutions (TABS), had a record number of TABS end-users at this year’s event. “Dealers did not want to bring their customers initially, as they were worried about our direct branch poaching them,” Melo said. “Now, our dealers are seeing we’re true to our word and are here to support them, not poach their customers, and are realizing the benefits to bringing their customers here, on our tab, too.”

Dealers have historically experienced a very high close rate with customers that come to the conference, according to Joe Contreras, Vice President of Product and Solutions Marketing for TABS. Just short of 300 dealers total, Contreras added that Toshiba also has the highest percentage of single-line dedicated dealers in the industry, at 40 percent, a fun fact when you also consider that Toshiba is likely the most under-distributed brand with the total number of outlets.

“We manage the direct and dealer conflict as well or better than anyone,” Melo said. Indeed, loyalty from multi-line dealers is very high, due to the way TABS handles its relationship with them.

“While you can never completely remove the complexity and possible confrontation between direct and dealer, I have told all my direct leadership if you steal Toshiba dealer business you don’t get revenue for it, and if you do it again, you don’t have a job,” said Scott Maccabe, President and CEO of TABS. “At the same time, dealers can’t steal direct business.”

Toshiba has a number of strong dealers who use it as their second of third line and do very well.  And with the launch of 23 new MFPs planned for this year, the company appears ready to make a move further up the rung. The show was also substantially up in production value this year, which according to Maccabe, is self-generating due to corporate seeing the ROI from TABS over the past few years.

“We have had record profits in the last 6 months, and continue to take some market share in a relatively flat market,” Maccabe said. He added that the company wants to grow at a rate that it can manage and control, versus trying to take over. “We want to incrementally move forward and incrementally continue to operate effectively to re-invest. That’s our goal and we have been doing that consistently.”

And the fact that Toshiba has grown with a relatively old product line is a testament to its dealers, added Maccabe. “Now, the gloves are off, and we feel we can really grow with this new MFP line,” he said. As far as the supply and demand issues that could come along with the launch of an entirely new MFP line in the same year, Maccabe said parent company TTEC is poised to support growth globally. “We are proactively focused on understanding the entire food chain and what supply capacities are, and communicating and ensuring that TTEC is in right position to support us.”

Heavy on the Hardware
“We met with our engineers to go above and beyond standard productivity and reliability enhancements, to make the MFPs an integral part of the workplace and easier to use,” said Contreras.

Under the guise of “Connect, Integrate and Simplify,” the 23 new products range in speed from 20 ppm to 85 ppm and include both color and monochrome devices. They have a very sleek and modern appearance, along with a tablet-style interface with customizability. Featuring a new Intel multi-core processor, the new products are driven by the e-Bridge Next Controller, which according to Tony Venice, allows applications to now be embedded onto the MFPs themselves. All existing applications from the prior generation of products continue to be available too. The card reader, if added, is available behind the machine covering, making for a cleaner finish. A 300 sheet, duplex-single pass feeder, which scans at up to 240 ipm, is standard for the new models with rated speeds above 55 ppm, and optional for models 50 ppm and below. Optional embedded OCR will scan to Word, Excel and PowerPoint. This is a big time saver, eliminating the need to reproduce or search for the original electronic document to reuse. Further, users can edit and add information to a digital version of a hard copy document. While the embedded OCR will feature very good accuracy for simple files, Toshiba’s Re-Rite OCR application is a more robust server-based option for more complex files. The new multi-station print solution, which is essentially secure release, allows users to print jobs to one device and release to any others. While each device needs to be licensed, users can change the number of sets, and can change to output in duplex. Offline stapling on demand for up to 50 sheets is supported on the multi-position stapling finisher. All the new devices are also EPEAT Gold certified.

Mobile capabilities showcased for the devices included the print and scan app for Apple and Android users. AirPrint is also supported, although not on the entry-level color devices. New scan to cloud applications supported include Google Drive, OneDrive and DropBox. While these need to be installed on a device via TopAccess, they are free with no license requirements, and the serverless applications run on the device itself. Icons for these can be loaded on the machine and accessed at the control panel. And the new user interface lets users customize button size, colors, or background, and also promote functions to the scrolling column on the home page for quick and easy access. Service numbers and a URL for supplies orders can also be baked into the control panel.

“We found the most common task people perform when walking up to MFP is making one copy, or copying and adding a staple into the upper left corner on a multiple sheet document, so we turned these into one-touch buttons to take away much of the complexity of performing these jobs,” said Melo. To address this need, Quick Copy, Copy and Staple and Simple Copy menus are easily accessible and can be added to the scrolling menu on the Home screen. In the case of Quick Copy and Copy and Staple, the documents placed on the platen or in the document feeder are copied, or copied and stapled in the upper left corner, in one touch. The Simple Copy menu includes selections for multiple sets, and staple or non-staple.

Vertical Market Investment
To address specific vertical market needs, Toshiba has developed customized control panel templates for seven different vertical markets, including healthcare, education, finance and logistics. The healthcare control panel, for example, in addition to Quick Copy, Copy and Staple and Simple Copy, includes ID Card copy to simplify copying the front and back of ID cards onto one page, and secure PDF is placed on the scrolling menu on the Home screen to allow a single button to set a destination and set a password and send. The ability to store and access forms is also supported. Public buttons connected to other resources in the background are also supported for the different verticals. For example, a third-party application that allows users to generate barcodes to be used by the ingesting application is also recommended to be part of the Healthcare control panel.

The Education control panel recommends many of the same capabilities as healthcare, while also supporting scan to grading through embedded Flash Grade. The cloud-based application produces a master and will grade each student’s test, provide a percentage of accurate responses and print a report detailing how each student did. Google Drive and PaperCut are also recommended for the Education control panel, while a scan loan app utilizing Docuware software is recommended for the Finance control panel. Toshiba will also begin offering front panel integration with Nuance’s Equitrac Office starting in the fourth quarter of this year. The partnership will also bring NSi AutoStore into the fold, an additional workflow tool that integrates into existing business applications.

Toshiba is also investing in significant training materials for its dealers to earn certification to become an expert in each of its seven featured verticals. According to Contreras, the comprehensive vertical market education program, which will launch in June with the Healthcare certification program, identifies the key challenges and solutions for each vertical market, and tracks employee progress through a certification process. Toshiba hopes to follow the launch of the healthcare vertical market certification with an additional vertical every two to three months. The program will be free to dealers, accessible through the Toshiba Exchange website.

“We’re not taking a one size fits all approach and developing a talk track; instead we’ll have unique offerings for each vertical,” said Contreras. As he explained, healthcare is very broad, and Toshiba would like its dealers to understand specific segments within each vertical. “Within healthcare, for example, different workflows are needed for the pharmaceutical department, the nursing station and the admitting department. Our program will be about understanding those needs across various departments within a vertical.”

Diversify, Differentiate with Digital Signage
Toshiba continues to make significant investments in the digital signage space as well, where it can play in vertical spaces ranging from grocers, to restaurants and retail, to churches. According to Melo, when Toshiba acquired the IBM retail business more than three years ago, they went looking for a solution they could own that would differentiate them and didn’t involve paper coming out of the machine. Available to Toshiba dealers for the last two years, digital signage is being offered by about 10 percent of dealers. According to Toshiba, the market for digital signage is estimated to be worth $20 billion plus by the year 2020.

“Our competitors can’t sell digital signage and make profit and margin like we can,” said Melo. “Digital signage is the new MPS, providing a solution to a customer that has a pain point, and it’s a platform for additional revenue through growth and annual updates. Someone will contract and create the content and manage it going forward.”

As one dealer explained, the investment for getting into digital signage is relatively low, requiring not much more than the cost of bringing on a specialist, and minimal demo equipment. In comparison, the entry into the 3D printing space is much more significant, with expensive equipment and supplies, and the cost of having a trained person with CAD experience on staff. Plus, 3D printing only appealed to about two percent of his prospective clients.

Digital signage packages on display at the product expo varied in size and application.  Virtuoso, which includes a display ranging from the size of a tablet to 70 inches, can be used to electronically place deli orders, for example, or to provide quick checkout at convenience stores. It can also be used as a virtual map of a store or facility. The Lift and Learn product can be used in retail to provide information right at the point of decision. So, for example, if an item is picked up, information about that item is provided on the screen, helping the customer toward a buying decision. As an analytics tool, to the software tracks how many times an item was picked up and put back, and how many times it was actually purchased, allowing  a retailer to make better decisions on restocking and future product offerings. The Style Advisor application is designed to enable upselling, by piecing together an entire outfit on screen based on the initial items that were selected by a customer.

As one dealer put it, the sales cycle is typically longer for digital signage, especially when compared to the typical 30 to 60 day turnaround for copier sales. Therefore, it’s recommended to bring in a specialist to focus on this market space, versus having your copier sales people have much play in this space.

3D Printing on Hold
On the other hand, the 3D printing space is not one Toshiba is looking to make a significant investment in at this time. “When we look at a space, we say, ‘can we do this well, can we make money and can we have our channels do it?’ And 3D printing does not fit all those barometers for us,” said Melo.

Added Maccabe, “3D printing is not a high volume business, and we’ve had dealers jump in and then jump back out. We don’t need to be all things to all people, and don’t want to spread ourselves too thin.”

Reeling in the Retail Space
Maccabe also now presides over both the TABS side and the retail side, noting that the opportunity Toshiba has in the retail space is massive, with the most immediate opportunity on the break/fix side. There will be some challenges at the get go, due in large part to retail doing 80 percent of its business between Friday at 5 pm and Sunday morning, a time in which TABS is not typically fixing copier and printers.

“When we acquired the IBM retail business, the service and maintenance were a separate run entity outside of the regular retail business structure,” Maccabe said. “We don’t want customers to be dependent on IBM to deliver break/fix when I can go to my print dealer environment, who have skills and knowledge in the community, and turn it over to them.

LEAD 2016, Toshiba Customer Event