Issue #0820/1 – While undertaking research for an article on Lexmark’s recent launch of its new range of Home/Student inkjet devices, we were shocked at how difficult it is to find them in stores (article now to follow next week). So we decided that an impromptu survey was called for. In this article we analyse the share of ‘shelf space’ owned by each of Brother, Canon, Epson, Hewlett-Packard and Lexmark, together with the market conditions, strategies and implications. We see just how many Lexmark inkjet products are available in-store right now. It’s not a pretty sight – for Lexmark!
Time was (not so very long ago) when you could walk into a store and be faced with rows of Lexmark products on the shelves, and vast stacks of Lexmark printers in their boxes, just waiting to be walked out of the door.
Curiously, it is almost precisely five years since we were prompted to undertake a very similar survey. It was at the time that Hewlett-Packard launched a huge range of new products in what was described as a Big Bang launch (see article "SoBigBang2.HP").
Now, June 2008, eleven stores have been investigated in each of the UK, Germany and the US, looking for all single function inkjet printers and all inkjet All-in-One devices available in each store. Data has been processed in terms of the percentage of ‘shelf space’ achieved by each manufacturer in each category and also the percentage of products available from each manufacturer’s current range as advertised on either their web site or in their price list (as appropriate).
Note that, in this article, ‘shelf space’ includes virtual shelf space and is a measure of the visibility of the manufacturer when a potential buyer visits the store, whether that is physical high street or retail park store or online store.
Current evidence suggests that it has become much more difficult to locate a Lexmark product to buy than in previous years and that potential buyers are actually far more likely to see Brother All-in-Ones on the shelves than Lexmark (accepting that Hewlett-Packard is the market leader).
But, what is perhaps most significant is that Lexmark’s share of single function inkjet printer ‘shelf space’ is virtually non-existent. One might simply say that Lexmark is pulling back from the single function market to focus on AiOs instead. This would be a logical decision and is, after all, the stance that both Brother and Kodak took in launching into the market as newcomers. There is absolutely no reason why either of these companies should not have introduced a single function printer but they have recognised that effort and investment is better committed to the AiO sector.
However, it is not as though Lexmark has withdrawn its single-function devices. The company now has 10 printers on the market in Europe, an increase of more than 40% over the number on offer five years ago.
However, indications could suggest that Lexmark is indeed moving in this direction. In the US, there are just four single function inkjet products available in comparison to the 10 European products! But then, to balance that argument, there are only 14 AiO products in the US compared to 21 in Europe.
| Products available - 2008 | A4 Printer | All-in-One |
|---|---|---|
| Brother | - | 16 |
| Canon | 8 | 11 |
| Epson | 8 | 7 |
| Hewlett-Packard | 40 | 38 |
| Kodak | - | 4 |
| Lexmark | 10 | 21 |
There is obviously no reason at all why Lexmark should offer the same number of products in the US as in Europe but, historically, the trend has tended to be for more variants to be available in the US than in Europe rather than the other way around.
Since 2003, the market has been joined by Brother and Kodak, both of which have entered the inkjet all-in-one market but avoided the single function inkjet printer market. However, it is the comparative numbers of products available from each of the pre-existing players that is interesting.
| Products available - 2003 | A4 Printer | All-in-One |
|---|---|---|
| Canon | 12 | 6 |
| Epson | 9 | 2 |
| Hewlett-Packard | 19 | 22 |
| Lexmark | 7 | 12 |
If we compare the numbers of products available from each of the manufacturers, we see that two of the manufacturers have actually reduced the numbers of single function inkjet printers that they offer, while all four have significantly increased the numbers of All-in Ones on offer.
| Difference | A4 Printer | All-in-One |
|---|---|---|
| Canon | -33% | +83% |
| Epson | -11% | +250% |
| Hewlett-Packard | +111% | +73% |
| Lexmark | +43% | +75% |
Increasing numbers of All-in-Ones is no surprise at all. They are now inexpensive compared to single function printers and combine all the functionality that could be required into one device, sitting on a single, small footprint, meaning that they represent excellent value for money (and better functional efficiency) when compared to the cost of putting together a package consisting of separate printer and scanner (and fax).
It is also of no great surprise that the numbers of single function printers from Canon and Epson have reduced – there is less call for them for the reasons outlined above.
However, what is fascinating is that, just as Lexmark has increased its single function printer offerings, Hewlett-Packard has more than doubled the number of printers in its price list – and it was high enough five years ago (!!). The reason for this (Hewlett-Packard specific) largely comes down to a combination of the increasing importance of photo printing and the increasing differentiation between ordinary home oriented inkjet printers and a business-specific line (Officejet).
From the Lexmark perspective, the increased numbers of Lexmark printers is just plain bizarre as there is no business-specific range in this category – an attempt at this is reserved for the AiO category – and Lexmark does not differentiate photo specialist printers either. In fact, Lexmark’s product differentiation is very poor, at best.
But – and here is a huge BUT – if we then start to consider the in-store visibility of the products, we discover a huge discrepancy where Lexmark is concerned. It is clear that numbers of products designed, built and offered by Lexmark is irrelevant.
Store ’shelf space’ - Single function A4 inkjet
Looking first at an average position over the UK, Germany and the US, we find that Lexmark comes a very poor fourth out of four, claiming less than 10% of the ‘shelf space’. This is an appalling result for a company that has prided itself over the years on being a leader in the market.
I would suspect that even Canon and Epson are disappointed not to be achieving more than about 20% each but, bearing in mind the fact that each of them offer less than a quarter of the number of products offered by Hewlett-Packard, this is actually a very respectable result for them.
What it means is that, on average, just over half of Canon and Epson products can be seen in-store when only just over one-quarter of Hewlett-Packard’s products can generally be found. The highest proportion of Canon and Epson products found in any one of the stores surveyed (UK) is 100%, whereas the highest proportion of Hewlett-Packard products found in any one store is 45% because of the vast range available. Lexmark’s average rating was a miserable 16% even though highest in one store came in at 40%.
Store ’shelf space’ - Single function A4 inkjet
Breaking the data down by country shows how the Japanese companies are discriminated against in the US in favour of the US companies – although the difference is not great.
To emphasise the severity of the situation, Lexmark products are non-existent in three of the UK stores surveyed and in two of the stores in each of Germany and the US. The only other non-existent products were Hewlett-Packard in one store in the UK and Canon in two stores in the US (but Canon took the lead in one store in the US with an impressive 47% share of ‘shelf space’.
Moving on to the inkjet All-in-One category, the situation with the four players discussed so far is very similar except in that Lexmark is managing to hold on to a higher share of ‘shelf space’ than Epson.
Where a difference is found is in the appearance of two additional players in the market, Brother and Kodak.
Over the past couple of years, Brother has worked very hard to raise its game and project itself out of the corporate arena and into small business and consumer markets by developing a highly successful range of inkjet All-in-One products, ranging from a basic three-function device right up to a sophisticated wireless 6-function office communications hub.
Evidence provided by this survey suggests that the strategy has been working well. Brother is, after all, now the second most visible manufacturer in its chosen technology space.
No one would expect Hewlett-Packard not to be the most visible but for Brother to steel second place is a huge achievement. For Lexmark to find itself in fourth place should be a disappointment to the company. Five years ago, Lexmark was in third place behind Epson with Canon almost nowhere to be seen.
During these five years, not only has Brother stormed into second place from nowhere but Canon has risen to second place from almost nowhere, displacing both Epson and Lexmark.
Store ’shelf space’ - Inkjet All-in-One
Breaking it down by country, the situation differs slightly from the single function printers. The US still favours Hewlett-Packard over Japanese companies, Epson and Brother, but Canon is very strong in the US, while US company Lexmark is not.
Kodak, as a very new player with only four products available, understandably has not achieved great visibility yet in any country.
Store ’shelf space’ - Inkjet All-in-One
Again, looking at the numbers of products actually found in stores (UK), two-thirds of Lexmark’s AiOs were found in one store but the average was only one-third. This is even lower than the Hewlett-Packard average (38%) when Hewlett-Packard has nearly double the number of products on offer.
However, it is the Japanese companies that score highly here. On average, more than half of Brother’s products can be found, two-thirds of Canon’s and an incredible 87% of Epson’s. There was at least one store for each manufacturer that offers the entire range, whereas the highest proportion of Hewlett-Packard and Lexmark products found in any one store was only around the two-thirds mark.
To conclude, when we see Lexmark’s financial results showing steady decline in the inkjet market and falling revenues on ink sales, it points to a global failure to hit the mark with the right products and marketing strategy. The visibility of its products in-store is further evidence of the decay.
In fact – we’ve mentioned that Lexmark does not differentiate products well and has no business-specific printer products in its range. In addition, Lexmark is the only manufacturer out of the four addressing the single-function market that does not have an A3 offering.
A3 printers are almost exclusively business oriented. There is no significant call for them in the home (other than for photo enthusiasts) and yet Lexmark, having declared that it will focus on higher volume customers (meaning business!) has no A3 product to offer those that have a need.
Indeed, I believe I’m correct in saying that Lexmark has never produced an A3 inkjet model whereas each of Canon, Epson and Hewlett-Packard have a range of products. Thus, those customers that are brand loyal and looking for an A3 product need to look to a manufacturer other than Lexmark.
Lexmark’s inkjet range has always been home-oriented and, despite an attempt in the latter part of the 1990’s to produce a sensible business inkjet printer (the ill-fated J110), the inkjet division of the company has failed to get to grips with the needs of the business market.
It now seems that its latest attempts to differentiate, with the home/student models (and probably professional/business designated models as well) is also doomed to oblivion.
~End~
