Collaboration to provide FedEx Office with new technology, sole source agreements, new revenue opportunities

Yesterday, FedEx Office, Canon and HP announced what FedEx Office President & CEO Brian Philips called a “game-changing moment,” saying, “We are transforming the world’s largest print-on-demand network.  We are not just collaborating with HP and Canon to introduce new equipment, but we are also upgrading all of our networks to be able to plug each piece of equipment into that network as it is installed.  We have been preparing for this for some time from an IT standpoint, and a lot of the heavy lifting has already been done. This includes our digital front end consisting of FedEx Office Print Online and DocStore, and our 2,000 stores worldwide, our 21 automated document factories with touchless printing from induction of the file through to production. [Editor’s Note: this is down from 36 facilities previously called closed production facilities or CPCs].  We also have 15 flagship sign and graphics printing facilities, often co-located with a retail site.  The sign business has been great and a lot of fun to implement.  For example, we are able to help a Who’s Who portfolio of retailers produce signage as close to the destination as possible with very fast turn times.”

Philips continues, “What attracted us was the collaboration that has been taking place between those two great brands, announced in 2009. Together, their combined value proposition and the technology they bring to the table are helping us create a unique and amazingly powerful ecosystem using technology from our three companies.  It will change the print industry and differentiate us from everyone out there. This sole sourcing allows us to standardize our fleet and makes user interfaces common for customers, no matter which store they come into or whether they use FedEx Office Print Online or DocStore, walk in with a thumb drive or pull documents from the Cloud.” 

Under the agreement, FedEx Office will replace all of the color and black & white copying/printing equipment in its 1,800 stores in the U.S. and Canada with next-generation Canon imageRUNNER ADVANCE products.  Canon announced its color line in this product family at Print 09, and one could speculate that black & white products with similar advanced capabilities will also be joining the mix.  In addition, FedEx Office has made improvements to its physical delivery network.  Philips explains, “Customers have the ability to pick up materials in the store, have them delivered locally using FedEx Office vans that are centrally dispatched using the latest technology, or we can put printed output into the FedEx Ground or Express transportation networks. Some customers print and send, others send and print; but we now have configurations that will meet all those needs of small, medium and large customers.”  According to Philips, the fleet of FedEx Office vans has now been updated with FedEx-like equipment including GPS. He adds, “Drivers have handheld devices that will let us know in 90-second intervals where they are going, what they are delivering, when they deliver and whether or not it was an on-time delivery.”

FedEx Office already had a substantial base of older generation Canon equipment as well as several other brands, including Xerox, within its network.  This alliance provides for sole sourcing of equipment and ultimate replacement of those other brands with HP and Canon equipment, allowing each to play to their respective strengths within each category. 

Dennis Amorosano, Senior Director, Solutions Marketing and Business Development, Canon U.S.A., comments, “Canon equipment in the FedEx Office stores and production centers was older generation imageRUNNER technology in addition to other branded equipment that FedEx Office has acquired over time.  This will transition to the newest Canon equipment, as well as adding HP wide format, laser printing capability, and self-service computing.  This will be the single largest customer implementation of Canon imageRUNNER technology to date. It is a great affirmation of the trust FedEx Office has in our technology and platform.”

Philips was quick to point out that although a significant amount of Xerox equipment is being replaced as a result of this deal, “Xerox has been a fantastic partner and they are supporting us in this transition.”

The arrangement also allows FedEx Office to participate in other revenue-generating opportunities, such as becoming part of the HP Snapfish photo products network.  Philips says, “Today we provide photo services in our centers through a Sony Picture Station kiosk-based platform. We enjoy the Sony relationship, and with HP Snapfish, we will also have an online presence that opens up a world of possibilities in parallel. In addition, the Canon/Océ pending acquisition is just icing on the cake. The beauty of the arrangement is that we are all innovators and close collaborators who are well-positioned to change the face of printing.”

In terms of the amount of work FedEx Office sees coming in over the network, which had seemed to be stalled at about 25% for quite some time, Philips says, “This metric has grown since we last spoke, and now about a third of our business comes in through the Internet. We are seeing those numbers grow at a phenomenal rate, certainly faster than our walk-in rate, as people move to take advantage of having desktop and mobile access.  We are also continuing to implement and enhance to our digital tools, and we can talk again when those are ready for launch. We want to make sure we get the digital front end right, the right platforms in our stores to produce the work, and to make sure everything is networked through to delivery.  That’s really what this new alliance is all about.”

Amorosano added, “From a Canon perspective, we are thrilled to be working with FedEx Office in this capacity and extending our partnership with HP to bring new capabilities to the table in this part of the print market.  It represents a unique approach where we, as a manufacturer, can be involved with FedEx Office in helping them and their customers fulfill unique needs.  For Canon, it is a nice affirmation of the new ADVANCE technology that we recently added to our portfolio, as well as our capability to manage an installation as large as FedEx Office. We are very much looking forward to helping FedEx Office deliver the benefits of the relationship to its customers.”