Digital explosion



OPI: Please tell me about Peach’s digital imaging solution – what does it entail?
Johan Ling-Vannerus (JLV): The concept is the result of our customers’ basic needs. We were trying to communicate in a different way what Peach is offering, and instead of talking about products, we decided to speak about a concept and its applications.
We are actually very proud of this whole imaging concept, because there are few, if any, companies in the world that have as much experience within each product category as Peach.
Alfred Wirch (AW): Digital photography has opened up a lot of opportunities for OP suppliers. Well known technologies are now used by a host of users, including those in the home. And it’s for this market that Peach has moulded and adapted its products.
We are enabling our customers to penetrate this new market and convert what was a declining tradtitional OP market into a growing new product segment. Aside from its individual products, Peach is offering the whole entry package for the home market (for example displays). About 250 billion photos are taken today, most of them in analogue format, so you can see the scope for digital photos. Even assuming no growth in this figure, imagine that every digital photo costs €0.10 to print… the opportunities are endless. The real question is: who will be the next Kodak?
OPI: So is the home user your main target?
JLV: No, it’s any person or company that’s digitally set up. We have the special Peach silver line range of products aimed at the SOHO user and we have the Peach office line for the person at work who needs products with higher capacities, functionality and speed.
OPI: What about the so-called four Ps within that digital imaging concept? What do they mean and how do they all link together?
JLV: The four Ps stand for print, protect, present and price – this includes all customer needs for their digital imaging centre at work or at home.
It’s a very easy natural workflow: any catalogue page, photo album, scrap book or store presentation should follow the 4 x P concept. If it does, customers will find what they are looking for.
AW: I give you an example. Besides printing a photo, a user might also be interested in putting it in an album, thereby protecting it and being able to present it. It is like with the iPod – the supplies are as important as the hardware.
JLV: Here’s another way of answering it: If you take a digital picture, it creates demands for many other product driven needs. How do you store it, distribute it, share it, how long do you want the picture to last, how large do you want to print it, etc?
Whatever the need, we have different tools and solutions for the user, all Peach branded, all developed to match perfectly well together. For our distribution partners, it is a huge benefit to have one supplier that can offer the complete solution in a one-stop-shop.
OPI: You said at Paperworld in January that you are aiming to substantially increase your turnover in 2006. Are you on target for now?
JLV: Yes, we are and we will substantially increase our revenues this year. Over the past four years, we have been working very hard on setting up distribution partners across Europe and the world. All these partners are now developing the local businesses very steadily. When we say we want to double the business, it is not because we are in a rush, but because our partners give us very positive feedback and we see enormous growth in promotions and activities.
Paperworld, for instance, was a very good show for us with good order intake on the show floor. There are not too many companies that actually get their order books out during the show. We do.
AW: You have to bear in mind, however, that this is a huge market – our current market share is so low that even if we are able to considerably increase our turnover, we still have a long way to go to reach 1 per cent.
OPI: So what’s Peach’s position now on a global basis?
AW: We are globally active with a global brand, but we are local partners to local players. The office is being increasingly transplanted into the home. By the same token, new products are surfacing in the office environment, such as photos and music. Everybody in this industry has the chance to participate and benefit from these new markets and opportunities.
JLV: Geographically speaking, we are present in all corners of the world now, from Iceland in the north, South Africa in the south, China in the east and the US in the west. In Europe specifically, I cover the UK, Scandinavia and Benelux while my colleague René Koller deals with southern Europe and the German market.
And we are fully set up for volume growth. Everything we do is based on volume, from manufacturing to logistics, and we need to have excellent partnerships with the global players to reach our goals. We feel that we can offer the globals added value with our considerable experience in and knowledge of these product categories, while at the same time still being small, fast and flexible enough to adapt to each customer’s individual needs.
OPI: Very specifically, how is the US market shaping up for you? I believe you have some challenges there?
AW: We are looking for partners in the country. And yes, you’re right about the challenges. In the US OEMs have a monopoly in the ink market at the moment and non-OEM market share is very low. It seems to require some legal action to change this situation. There is no compatible inkjet industry in the US at present apart from refills and they are not what the majority of customers want. It’s time to offer a choice to customers in the US. Once there is one, we will have a real chance.
OPI: What about Asia?
AW: We have signed a letter of intent for our operation in China and hope that we can start there this year.
OPI: Away from geographical coverage, I’m interested in Peach’s product and customer portfolio. What channels do you supply to?
JLV: As I said before, we mainly sell two distinct ranges – the Peach silver line and the office line. These two ranges have entry level office products for private consumers and SOHO users, and traditional office machines and professional products for high-end users. In total, we cover presenting products, binding systems and supplies as well the protection range of products which are essentially all the laminating and shredder systems.
The only category where the needs of all customers overlap is in the printing area as everybody wants the same high quality. Indeed, our focus on top quality is becoming a benchmark within the industry and there has never been a compromise on this issue. We were very proud to be the test winner in Germany’s ColorFoto magazine for our new innovative Peach Snap system for Hewlett-Packard and Lexmark cartridges.
Both the business and consumer market need printing quality at affordable prices and Peach offers this to both channels. They key is to sell the right product to the right user. All users have different needs, depending on whether they are large or small, mobile and located in an office. Our solutions solve the varying needs.
OPI: What about growth – where is it the strongest?
JLV: I have to admit that the fastest growth is in the retail arena where Peach has opened up some new channels and price points. Our founder and chairman Dr Ueli Wolfensberger is a true entrepreneur and he is still behind the company, driving new innovations and systems that enable us to do extraordinary things in the market. We see the retail market as an interesting challenge as it’s faster moving and more demanding than perhaps the traditional B2B channel.
That said, we are dedicated to supporting the needs of both channels and their different types of customers and we see it as a strength of our company that we can deal with these multiple demands. Packaging in retail, for example, demands more product data and more self-explanatory information than in an OP mail order company. When our retail packaging arrives at a mail order company, it will be positively surprised by the clear and easy-to-read information and instructions.
The demanding office customers, meanwhile, look out particularly for quality, efficiency and quick start-up times. So we can now build the features that were developed for products in this segment into retail products, helping retail users finish their work faster.
AW: As a whole, we want to succeed with our old partners, but sometimes there are also new players that you better not ignore. There are many advantages in both channels.
OPI: Prices for shredders, laminators and digital cameras have fallen dramatically over the last couple of years, probably in line with what the end consumer is willing to pay. Has this had a knock-on effect on prices in the traditional B2B market?
JLV: Not significantly, because those customers’ needs are different. If you try to sell an entry level SOHO product to an office environment you will fail. The customer in the office has much higher expectations in terms of speed and multifunctionality.
OPI: What do you perceive to be the main challenges in your market at present?
JLV: To bring constant quality, support and service to our customers – without these three qualities Peach will not succeed.
OPI: What about the opportunities?
JLV: The traditional binding and laminating market currently represents just a fraction of all the printers sold. Last year, more than 120 million printers and 80 million digital cameras were sold worldwide. The forecast is that 865 million digital cameras will be built into PDAs in 2008.
I think we can agree that we are working from a small top of a huge iceberg at present. The opportunities are enormous and we invite all our customers that share this view and wish to take part in the challenge to come and talk to us.
AW: Our overall goal is to replace the 250 billion analogue photos with Peach PPPP products. As I said, the race is on to replace Kodak and Peach is definitely one of the contenders.