HP carves multifunction market out of major retailers

HP carves multifunction market out of major retailers

According to Hewlett-Packard, the major retailers are driving the multifunction computer products market. And it claims to have a 42 per cent market share of what it describes as the fastest-growing category of the SOHO and personal computing market.

In a recent survey of leading high street retailers, researcher GFK Marketing Services reported a year-on-year volume growth of 80 per cent for multifunction products sold during the same period.

HP attributes much of its success in this emerging sector to partnerships with leading consumer and SOHO retail specialists like Officeworks. HP has partnered with Officeworks to establish multifunction products as a separate product category.

According to Adam Heathcote, senior buyer, business machines with Officeworks, since implementing a dedicated multifunction aisle in its 36 Australia-wide stores, products like HP's All-in-One OfficeJet series now account for a large portion of Officeworks' total sales of fax and multifunction machines.

HP's All-in-One series comprises colour printing, copying, scanning and faxing. "Multifunction products are a relatively new phenomenon in the Australian market and will become a dominant category for Officeworks," Heathcote said.

"In the next 12 to 18 months we expect multifunction devices like HP's All-in-One series to replace fax machines, particularly as the price difference between the multifunction devices and plain paper fax machines is coming down," he added.

And according to Edmund Wong, market development manager, emerging products with HP Australia, it is already happening in the US market. "We are seeing a decline in the plain paper fax market in US superstores and the growth of the multifunction product categories as price points become more affordable," he said.

Wong believes that multifunction products will dominate over single usage products, especially fax machines, in the small business and SOHO market, and thermal faxes may disappear altogether.

Heathcote said that the HP All-in-One is an easier sell than most computer products. "But the challenge has been to communicate benefits like space saving, effici-ency, ease of use and cost savings to our customers," he said. Officeworks has redefined its marketing approach with emphasis on educating consumers to the benefits of multifunction devices, he added. Heathcote explained that HP established a close relationship with Officeworks and has worked cooperatively to educate the retailer's customers about the product.

"We developed a plan to educate customers on the range of multifunction products available at Officeworks, with strong support from HP. This included a video and new point-of-sale signage," Heathcote said. "We wanted to clearly define the All-in-One series as an 'upsell' from fax products."

Heathcote claimed that the dedicated aisle that Officeworks introduced to its stores in February clearly identifies multifunction machines from fax machines.

"HP has worked closely with us over the last 12 months to help us plan and implement the multifunction aisle, and to create the supporting point-of-sale awareness campaign, a core component of which was a video," he said.

"Officeworks stores have a clear and consistent store layout with strong educational point-of-sale signage to help purchasing decisions. This highlights the benefits and features of individual products, helping customers select the appropriate product to suit their needs."

HP has also created a number of sales promotions to reward customers purchasing its All-in-One products, the most recent of which was a $100 cashback with any purchase from the range. According to Wong, this promotion, which concluded on July 31, was extremely popular and successful.

"The combined result of these initiatives has been outstanding national sales growth. HP has comfortably achieved leadership in both the volume of units sold and revenue for this product category at Officeworks," Wong said.

HP's success in boosting sales was recognised when Officeworks presented a supplier award to HP as the leader for category management of multifunction machines in July.

"We are committed to continuing to grow the category and to increase our dominance in the marketplace through close relationships with our key partners," said Wong.

HP launched the OfficeJet All-in-One series in 1996. It is primarily aimed at the small business, SOHO and executive market.

The All-in-One series is priced from $799 to $1899 (RRP including tax).

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