• IKEA’s step into leasing illustrates growing services trend

        • As IKEA announces its trial to lease office furniture to businesses, Mike Mulholland, Head of Services and Solutions at Brother UK, analyses the opportunity for the print industry to grow its services provision.

          Leasing and subscription models are becoming more intertwined with our day-to-day lives. Consumers and businesses alike are increasingly opting to rent products as services, which offer them more flexibility than ownership. Music, films, cars, food, and even clothes are just but a few product categories getting a new ‘lease’ of life under contract and subscription models in the circular economy. 

          In February this year, the leasing model gained a big new advocate too. Ikea announced that it plans to trial leasing office furniture to business customers in a move that commentators say is a radical departure from its traditional business model.

          This step into the B2B leasing space by the furniture giant demonstrates how attractive the market currently is. An increasing number of firms are beginning to favour the benefits of acquiring kit under lease, rather than buying resources out-right, and traditional transactional-sale vendors are waking up to this opportunity.

          It’s true that the print industry is well ahead in tapping into this trend. Many vendors and channel partners have adapted to become less reliant on transactional sales - moving more towards providing systems under lease with the development of managed print services (MPS).

          The growth of MPS has proven to be a win-win for both supplier and customer. The former benefits from the security of regular contracted income, less exposure to margin pressures, with added revenue opportunities through supplying helpful augmented services. The latter enjoys less capital expenditure, greater productivity and lower costs by outsourcing the maintenance of systems – UK pharmacy chain Day Lewis saves more than £100,000 each year on printing from its MPS solution with us.

          But there’s a challenge to overcome as the industry continues to transition towards services, expanding the choice of MPS suppliers for customers. Vendors together with their partners must adapt and improve their tried and tested MPS offerings to differentiate services against the competition. Attention to supplies replenishment, fleet renewal frequency, device monitoring and servicing levels, and other new augmented services will each be key in setting one MPS apart from another.

          Mastering and refining MPS will help the industry to thoroughly capitalise on the decline of ownership. Another key reason for IKEA beginning to lease products is to push the firm towards a circular business model and reduce its carbon footprint. Leasing print hardware, that can be maintained by resellers between cycles, reduces the likeliness that devices are disposed of towards their end-of-life. Channel firms are better positioned to recycle kit or sell-on devices, and the wider rollout of services would as such, help create less waste.

          Whether it’s for furniture or printers, the leasing model looks set to grow in popularity. The opportunity for channel firms to tap into this trend is as appetising as a big bowl of Swedish meatballs.

          For more information on managed print services by Brother UK, visit: https://www.brother.co.uk/business-solutions/mps

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