The pandemic has transformed and accelerated secular shifts in just about every business segment, as it altered both the manner of consumption in goods as well as the paths to purchase. In dining, grocery and retail, those effects have been pretty obvious. We know that the workplace has been impacted, but so have all of the product lines that service the work economy.
Canon USA, which has products across the business and consumer tech productivity chain, is experiencing this effect, which requires a rethinking of its approach to home and work technology marketing. The company recently launched a new marketing team, dubbed Hybrid Solutions Group, that addresses the increasingly blurred lines among workplace, home, consumer and B2B productivity markets. Jerry Hsiao, director of business planning at Canon USA, discusses this reorganization and digs into implications across the marketing chain. Home, office and the home office aren’t what they used to be. Listen to the entire podcast at this link.
MediaPost: Marketing across B2B and B2C is challenging for brands that play in both worlds. How did you organize the marketing previous to the pandemic?
Jerry Hsiao: The laser and the scanner product groups were on one side of the Canon business -- what we call the BICG (Business Imaging and Communications Group). And inkjet, calculators, and presenters were on what we would generally say the consumer side, along with cameras. That was kind of before the pandemic, before HSG. So with the BICG side with laser and scanner we were going definitely more towards B2B.
And then we also do have business in the retail channel, such as Staples and Office Depot or with Best Buy and Amazon. But again, it was geared more towards business home use or small and medium-sized businesses rather than a pure B2C type of message, while again on the ITCG [Imaging Technologies & Communications Group] side it was definitely much more on a B2C message in marketing.
MP: We dropped an acronym there -- HSG -- which we'll get into in a second. But before we get to that, bring us inside, since you were watching the ways in which people were veering towards different products and using different journeys to get there. What actual changes were you seeing in the sales and the consumer funnel during the pandemic that were sort of queuing you to this idea that you were going to have to rethink the way in which you are organizing your marketing?
Hsiao: So I want to say, actually, even before the pandemic, we definitely noticed changes the focus and the shift from brick and mortar to online purchasing. So one of the things that we always did with regards to HSG, everything became faster, everything pushed up the transition. So because of that, we saw a blurring of the lines between B2B and B2C as well as this shift in online. So, from a funnel perspective, I would say again even before the pandemic we saw this change in the ways that users would be purchasing our products, whether it be laser printers or scanners or inkjet devices.
MP: Were you seeing differences also in the product mix? Is the migration to remote work changing what sells?
Hsiao: Even within the enterprise environment, we've noticed before the pandemic a shift from the larger group size copiers and printers down to more desktop-size printing solutions. And with the pandemic, people are definitely looking for these types of products. And our dealer and reseller business partners definitely saw a dramatic decline, because of office closures.
However, they saw a similar pickup in their needs from their end users clamoring. Hey, I have a workforce of 1,000 people, I need to get them some printers. Again this kind of theme that things that were happening, even before the pandemic got accelerated or amplified because of the pandemic.
MP: We should say that “HSG” means Hybrid Solutions Group. Why was the previous organization no longer working or not working as well for this new configuration of consuming patterns?
Hsiao: I would say there are two things we saw t we could do better with HSG. Again, because internally with Canon, we had two separate sides of the house. We were almost competing or marketing within the same channel. So one example, was for Staples or Office Depot, what we call the office superstore channel, the traditional pen and paper type of products.
Because of Cannon structure, we have both a laser sales team and marketing team that's going to Staples as well as inkjet sales and marketing teams going to Staples essentially almost for the same type of end users. So we were unfortunately kind of competing with each other. We definitely tried to work with each other as much as possible, but because of the two different groups, we saw that there could definitely be a better usage of funds and resources.
And second, when we separated the laser and scanner group, the messaging was very much focused on the B2B partners: How do our partners, our customers, sell to the end user? But with HSG, now we're blending that message and working with our partners, driving awareness of Canon products. Canon is a very broad company with a lot of product groups and deep history. But honestly if you just go up to someone on the street and ask, have you heard of Canon, most likely they're going to say, Oh, the camera company.
Their awareness of the other products like printers scanners is much lower. So we want to build the awareness for Canon, for these other products in these other channels and usage locations.
MP: Okay, so we've teased HSG enough, let's dig into it and actually define what this is. It's called the Hybrid Solutions Group, it's a different way of organizing both sales and marketing or marketing in particular?
Hsiao: It's actually both sales and marketing. So it's a completely new division within Canon, a complete self contained business unit where we have marketing, sales, product planning, business planning where I'm leading, as well as finance and everything.
MP: So let's define what this HSG actually contains.
Hsiao: We have a dedicated sales team that goes to covering across all the channels that Canon touches in the U.S. versus the other two divisions they're more segregated. Again, one side of the house is more B2B the others B2C. HSG is across all of the channels, where again the blurring of the lines, because the end usage occasions, is not just say a home use or consumer use or just a pure business use.
And because of the pandemic, homes are becoming offices and there's no saying one thing or another anymore. So there's a dedicated sales force reaching out to all the channels, there is dedicated product lines and product support and product planning, as well as finance and administrative support for all aspects of the business.
MP: Is it defined by the product set that you're handling or the consumer target?
Hsiao: It is defined by both. What I mean by that is, our product has specific product usage occasions, which means certain usage end users. So it is pretty broad. Our laser printers, for example - the price point starts at $169 or $159 and runs to $3,000. And within that product set in assortment we have carved out basically strategy where certain price points and certain features are geared towards certain consumers and certain channels. And, while the higher end will be more B2B and the lower end is B2C, everything in the middle is a little bit blended in the pandemic world work from home hybrid solution.
MP: Who are the targets, and how does this plan work across channels like retail and direct?
Hsiao: I'll take the example of the product assortment strategy. Our lower end, what we call opening price point printers, would be geared more towards our mass market partners. So the lower end products go up to, let's say, $499 price points with certain feature sets. The lower price point go to mass markets such as Walmart and Target.
Let's say $299 to $499 maybe go to the Staples and Office Depot and Best Buy. And Amazon is out there; they sell everything. That would be the channel set from a price point perspective. And then from our higher price point of higher feature set, we would go towards our distribution in direct channel working with partners like CDW, Dell and individual reseller companies that will serve more regional, small and medium sized businesses. Those would be our product set with price point $399 to $899, let's say.
And then we would go to our traditional dealer partners with the higher end models that are definitely geared towards the large enterprise or small workbook solution, networked environment where multiple people will be using one printer and that would be from $899 up to the $3,000 price machines that I've talked about.
MP: So from the messaging and media side, what is your remit here? Is there a dedicated campaign that's happening across channels that reflects this change?
Hsiao: Before we were almost competing with each other and fighting for the same end user. With new HSG, with the pandemic, and with assortment strategy what we're looking to do is if your usage, or if your need is X, then this is the printer for you. And if your needs and usage is Y, this is the printer for you. So that's what we are building now for HSG overall product assortment and marketing message perspective.
Our message to folks about HSG is, whatever your needs are, whether it's work from home or a small, medium sized office, we have the right product for you. And depending on where you fit it may be an inkjet or laser, or different price point of inkjet or different price point of a laser.
MP: When it comes to retail, you still have the risk of channel conflict and cannibalizing from each other, so how does this organizational change impact working with retail?
Hsiao: Interesting question about channel conflict. So that's where definitely the product assortment strategy comes in, where we actually have dedicated and even specialized models and SKUs for different partners and channels that will not be crossing over to other channels. So that's one way for us to differentiate and bring value to our partner. We say, as you’re working with Canon, this is what we have determined to be best set for your end user. And you don't have to worry about competing with Amazon, let's say, or a bigger dealer if you're a reseller, for our price points for these type of the end users.
So we're definitely using the assortment strategy to help with that. We also have a more inclusive message with our partners. For example, before HSG, Canon could be working with Staples during the holidays and placing two different ads for printers, one for inkjet and one for laser, and it could be two different messages. We weren't really working together on crafting the one Canon message or solution.
Now we are able to better coordinate on that message. We're better focused and able to leverage our product sets. So instead of competing with the same price point, we could offer them a low end and the high end at the same time, with the same message on the same ad for Canon.
MP: Looking forward to post-pandemic, what patterns are you seeing among your consumers about what's going to be permanent in your market, and what's probably going to spring back?
Hsiao: We expect that work from home will never go away. From surveys internally and externally, there are benefits from a hybrid working situation where there's work/home balance. Productivity did not actually seem to have suffered, while folks like to have an option to work from home. It will remain in some form or another.