FedEx Kinko’s — Network of Resources

Business happens pretty quickly in the printing trade, and the same can be said for the shipping industry. Merge the two together, and you can expect the pace to get ratcheted up a level or two.

Take the humble beginnings of FedEx Kinko’s Office and Print Services. Paul Orfalea, founder of Kinko’s, put a couple of copiers in a taco stand on the campus of the University of California-Santa Barbara in 1970 and sold a minority stake (tacos not included) for $200 million in 1996. Today, the printing and shipping hybrid does just north of $2 billion in annual revenues with a staggering 1,600 locations.

The print aspect of the overall company, formed by the 2004 acquisition by FedEx, serves as a back office for small- to medium-sized businesses and a remote office for traveling professionals. The back office realm provides a comprehensive suite of services for clients—not only document management via full-service color and black-and-white digital printing, binding and finishing, but also direct mail services, banners and POP displays. Oh, and of course, there’s office supplies and shipping.

Traveling Pro’s Dream

The company also created an environment where a traveling professional can use a store as a remote office via the Mobile Professional Program. It offers computer rentals, WiFi and mobile professional accessories, such as computer cords and cell phone chargers.

The “don’t blink” speed at which change impacts FedEx Kinko’s isn’t about to slow down, either. In June 2006, FedEx Kinko’s began its national expansion of new centers. In the past year, the company has opened nearly 200 stores and, in the next year, plans on opening another 300. According to Tom Leverton, senior vice president of operations growth and development, 2,000 more stores will be opened over the next five years.

Leverton says the stores are different from what customers have come to expect. A typical Kinko’s store was about 6,000 square feet, but the new ones will be about 1,500 square feet. Instead of a dozen employees buzzing about, these boutique-size shops will be manned by just three people.

The smaller store model offers improved customer service and convenience, enhanced pack-

and-ship stations and about 700 office products. The centers will carry a selection of business papers and writing instruments, along with new technology offerings such as DVD media, thumb drives and mobile phone accessories.

Hub-and-Spoke Network

Leverton notes that FedEx Kinko’s operates on a digital hub-and-spoke network, where small stores with moderate capabilities are digitally connected to larger stores. Whether a customer wants 10 or 1,000 copies, it can be fulfilled. A 10,000-copy job can be sent to a larger facility.

In January 2006, Ken May became CEO, and for the past year, he has worked to incorporate Kinko’s into the culture of FedEx, while rolling out new businesses and improving overall service levels.

“After the acquisition, we went to customers with focus groups to ask them what FedEx Kinko’s means,” adds Leverton. “FedEx meant shipping; Kinko’s meant copying. When we put them together, customers gravitated toward terms like business services, and that opened a lot of doors for us.”

Along with visual enhancements, FedEx Kinko’s is offering new capabilities with direct mail services, a print online e-commerce interface and signs/graphics. Direct mail services include design, production, finishing, address cleansing and verification, as well as mail processing.

“Kinko’s is not trying to break into the business of high-run direct mail, but we are trying to serve the small- and medium-size businesses that are not able to afford to go to a large direct mail house,” according to Leverton.

Print Online is the company’s Web-based print management tool for customers to digitally send documents directly to the stores. Leverton says the tool provides customers with the full range of options that a FedEx Kinko’s team member has behind the counter. Clients can select from extensive printing and finishing options, track order status, reuse saved print jobs and review order history.

With Print Online, customers can also preview orders, track job status and pay online. Customers are notified when the order is ready, and they can select from a variety of delivery options available, including FedEx Express or FedEx Ground services.

Large-Format Signs

FedEx Kinko’s is also delving into the large-format realm with its signs and graphics offerings. “You can enter a 1,600-square-foot Kinko’s that may not have any sign equipment in the store, but you can get everything set up in the store, and we can produce it at a different location,” Leverton notes. “So you get the full capability regardless of what Kinko’s you go into.

“We are very happy with the amount of growth we can drive with our new product offerings,” he adds. “We continue to invest behind our core business, and we’re really starting to get traction in the services that are going to drive future growth.”

FedEx Kinko’s competes with independent and franchise quick printers, but Leverton says that the company is a good local partner for commercial printers.

“When you get into higher volume document management—not to the level of offset, but below it with digital reproductions—we have a good number of large commercial clients where we can offer them very competitive rates because we already have our footprint out there,” he remarks.

What makes FedEx Kinko’s different from its competition, and what makes local printers team up with the print giant, is its different level of overall service in all of the stores. The company relies on a certain degree of consistency, quality measurement and continued investment. This upgrade in tools and equipment inside the store is what is delivered to the customer.

“Print is a very complicated business where a lot of customers don’t understand the differentiation of when to go offset, when to use quick print or when to output it in their own offices,” Leverton concludes. “We offer a consultative service, and the more we can be part of the overall printing community, the better off our collective customers are going to be at the end of the day.” PI