Bar Code Printer Vendors Defy The Odds

Recently, I contacted some major bar code printer vendors to grill them for information on how they are surviving the economic slowdown and for their views on what lies ahead for the industry. Part of what I found was that each of these companies has survived by maintaining a strategic focus in the market.

For instance, Vic Barczyk, VP of sales and marketing for Cognitive (Golden, CO) said the company's market for portable printers has actually been growing this year. "The economy is causing all businesses to adjust their operational structures," Barczyk said. "On the sales side of our business, we have focused on a niche market where there is less competition - the portable printer market. Retailers and rental car companies are prime markets for portable printers. We predict our sales will grow 30% next year in this part of our business. So naturally, we are pouring more effort into a market that offers better opportunities."

Zebra Technologies (Vernon Hills, IL) VP of Sales, Dave Crist, said Zebra is reevaluating existing markets to gain a narrower focus on vertical markets and to find new areas of growth potential. He listed Zebra's existing markets as ERP (enterprise resource planning) in manufacturing, retail, hospitality, healthcare, security, and order fulfillment. "Anything that solves a customer's problem is an app," said Crist. "If you really get into your customers' businesses, you can find new ways to promote your products. That's why we are looking more deeply into our existing markets. What solved a problem in one area of a business will likely solve problems in other areas."

Printronix (Irvine, CA) is a relative newcomer to the thermal printer market. "We've had to learn to build a business in our competitors' own back yards," said Ralph Gabai, senior VP of sales and marketing. "Our focus had to be unique. Ultimately, we turned to online data verification and validation. By creating a product that allowed remote management of networked thermal bar code printers, including bar code quality verification, we created a niche for our company. It has enabled Printronix to enter the [thermal bar code printer] market and compete against players that had been there for years."

If new business isn't materializing due to cuts in capital spending, then sometimes you have to concentrate on keeping the business you have. Intermec Technologies (Everett, WA) VP of Printers and Media Business Unit, Mike Wills said, "The worst sin would be to lose a customer. Almost every company has felt some effect from the economy and the events of September 11th. Our sales have been flat, and we continuously search for ways to find new business opportunities. But, our real focus has been on customer retention. We are more customer sensitive than ever, and we will protect our customer base."

Emerging Markets: Security And ERP
Almost every vendor I spoke with said sales this year have decreased or, at best, been flat as compared to last year's sales. Yet, new markets are emerging. Of course the most touted emerging market was in security -specifically, in airports, airlines, government, and corporate environments.

Zebra's Crist said bar code-based security systems usually combine plastic ID card technology with traditional bar code labeling to form a hybrid solution. "The ID card will carry special user information," Crist told us, "including personal data, employee information, access authorization, and possibly biometric ID. Traditional bar codes may be used to track parcels or work items throughout a building. Eventually, we will see bundling of technologies, such as bar code, mag stripe, and RFID (radio frequency identification)."

Continuing, Crist said it is unlikely there will ever be a one-size-fits-all security solution. Every individual application will have its own customized security system. As vendors develop new security solutions, they will learn things that will help in future applications.

Barczyk said Cognitive's new business will likely come from mass merchandisers. "People who normally would shop in high-end retail stores, may have to tighten their belts with regard to spending," said Barczyk. "This means retailers, such as Target, Wal*Mart, Kmart, and others will be fighting to gain market share. This will open new markets for vendors offering efficiency-improving technology, including portable bar code printers."

Printronix will look to opportunities in data mining as a source of new business. It will also try to align itself with current software installations. ERP is a hot technology right now. As ERP makes its way into companies, Printronix will try to capture new business where thermal bar code printers are a necessary add-on to the system.

Channel Partners Will Be Critical To Any Turnaround
Virtually every vendor said channel partners will play a crucial role in any economic turnaround. The key concern for vendors is to make sure their reseller networks have a clear understanding of the market and how to approach sales.

Sales pitches touting pricing and performance comparisons have been replaced by promises of a quick payback. Reacting to customer requests is no longer acceptable; resellers must understand potential customers' businesses and explain to them why they need bar code technology. And most of all, resellers and vendors must be on the same track with vertical market targets. Each vendor has a specialty. Resellers and vendors must work together to make the most of that specialty.

Most vendors have elaborate training programs planned to keep channel partners up-to-date on the latest market drives. It is not uncommon to see vendors going out in the market on sales calls with VARs when necessary. At the least, vendors have developed steady lines of communication with channel partners. Vendors and VARs must work as a team.