Adobe/FedEx Kinko’s Deal Creates Firestorm

By Cary Sherburne, Senior WTT Editor

July 10, 2007 -- In early June, Adobe and FedEx Kinko’s announced a collaboration to extend the reach of FedEx Kinko’s Print Online application to users of Adobe Reader and Adobe Acrobat software. Both Adobe software applications will feature a connection to FedEx Kinko’s Print Online functionality, including a “Send to FedEx Kinko’s” command on the File menu and a “Send to FedEx Kinko’s” button in the toolbar featuring the FedEx Kinko’s Print Online “beacon.”

Adobe positioned this move as a convenience for FedEx Kinko’s customers, making it easier for them to access FedEx Kinko’s printing and shipping services.  But while Adobe and FedEx Kinko’s were undoubtedly savoring a sense of victory, a printing industry firestorm was brewing.  Within days of the announcement, Adobe’s CEO Bruce Chizen had been contacted by a number of printing industry leaders, including a letter co-authored Joe Truncale of NAPL and Steve Johnson of NAQP which had also been endorsed by a number of franchise print executives, and communications from PIA/GATF’s CEO Michael Makin. Industry leaders were crying foul, strongly objecting to what was perceived as favoritism to a single vendor and asking Adobe to rectify the situation.

To his credit, Chizen has been responding personally to many of these communications, admitting that Adobe made a mistake in entering into this agreement with FedEx Kinko’s and that the company was looking into alternatives, including exploring contractual ramifications.  WhatTheyThink has learned that he is in the process of setting up a meeting between Adobe executives and industry representatives, which is likely to take place after the 4th of July holiday week.  Meanwhile, Adobe has deflected specific media questions, responding with the following canned statement:

"The intent of the FedEx  Kinko’s partnership was  to provide a more streamlined service for  consumers who use Reader and value a  quick and simple online print  option.  We acknowledge our mistake of not  doing a better job  communicating our plans to the entire eco-system of our  print  partners. This is one of our oldest and most valued groups of customers.   We are actively seeking a resolution to this issue through  direct dialog  with our customers and with the organizations that  represent  them."

Even this statement has drawn criticism, since many competing print service providers, especially in the small commercial and quick print markets, view themselves as offering a “quick and simple online print option” for their customers, or if they don’t, they certainly would like the opportunity to leverage Adobe’s respected brand and broad influence. And it is not only the so-called “Print for Pay” market that is irate over this Adobe blunder.  In-Plant Graphics Magazine ran a June 29th article headlined “In-Plants Furious about Adobe/Kinko’s Link.”  The article quoted a portion of a petition being circulated by The Association of College and University Printers:

“Your adding a commercial link complicates the process of serving our client base who may unintentionally send work outside the corporation or school believing that the link is authorized by our parent organizations. Please revisit your decision to include this link as an unnecessary and invasive interference in our organization’s business.”

FedEx Kinko’s also declined to speak live, stating in an email,

"The relationship between Adobe and FedEx Kinko's was established with our customers in mind. The link to FedEx Kinko's through Adobe Reader gives our customers quick, convenient access to our network of office and print centers throughout the United States. We value this alliance and believe it provides a simple printing option for many users of Adobe Reader."

Although Adobe declined to speak directly to WhatTheyThink as it was sorting through the issues, we interviewed a number of industry executives from the associations and franchises, as well as monitored the PrintPlanet discussion groups and postings to PrintCEOblog.

Unilaterally, the people we spoke with were incensed, felt that Adobe’s move was a slap in the face to an industry that has been a huge supporter of the company, and that the company’s move “flies in the face of what American commerce is all about.”

PIA/GATF’s Makin pointed out that his organization represents 12,000 members, and the FedEx Kinko’s chain represents less than 1,500 establishments in the U.S., adding, “We are incensed. We have worked with Adobe for many years, and they have done great things for the industry. They have magnificent market share, thanks in large part to the support of the industry. For them to go off half cocked and do something like this demonstrates very poor judgment on the part of the executive suite.”

One industry leader stated, “I know categorically from emails I have received … that Adobe is freaking out right now, and in major damage control all around.” 

When asked why it took so long for this issue to bubble to the top of the industry’s consciousness, Makin stated, “In deference to our relationship with Adobe, we did not jump the gun and immediately condemn them. We have not remained silent, but we did not go public prior to our July 2nd press release, giving Adobe time to reflect on the situation and to come up with plans to address the issue.  We wanted to get to the bottom of the situation and we wanted them to realize the significance of their actions and how outraged and incensed the industry is.  In my 12 years in the printing industry in North America, I have never seen an issue that has gotten people so incensed.  I don’t think Adobe realized what they had done. They made a terrible miscalculation as to the impact this move would have on the industry.”

Coincidentally, I was at the IPA Technical Conference when this deal was announced, and there was an Adobe keynote speaker at the conference that morning.  I asked him to comment on the announcement, and he basically sidestepped the issue.  I was surprised, though, that others in the audience didn’t take up the line of questioning once they learned about the deal.

While most printers pride themselves on the quality of their offerings and a high level of customer service, many believe FedEx Kinko’s is not their biggest competitive threat, since they feel they have a definite service advantage over FedEx Kinko’s.  In fact, in recent research on the Small Commercial and Quick Print market conducted by industry research organization PRIMIR, the biggest competitive threat facing this market was identified as customers bringing work in house as a result of more highly functional color printer/copiers being installed in the enterprise.  With that in mind, though, the addition of the “Send to FedEx Kinko’s” button in Adobe Reader and Acrobat has the potential to exacerbate that “top competitor” by unfairly encouraging office users to send more complex work that they do not wish to produce in the office environment to FedEx Kinko’s—work that might have gone to the in-plant or local printer. 

Not that printers take FedEx Kinko’s lightly, by any means.  Franchise Services’ Rich Lowe stated, “I think in reality, the Adobe deal is a tremendous public relations coup for Kinko’s.  To my knowledge, Kinko‘s has not been extremely effective at executing its ecommerce strategy, but they are Kinko’s, and they have FedEx backing. They are as smart as anyone in the industry, so I always watch what they do. I never underestimate them.”

Lowe added, “I hope they change their position.  We think it is inappropriate and exclusionary. They should rescind their decision and make that technology available to all service providers.  Customer can choose who they want to do business with.”

NAQP’s Steve Johnson echoed this sentiment, saying, “I don’t know what their contractual obligations are. We just ask that they make the playing field level for our members.  The marketplace should sort that out, rather than a monetary deal between two suppliers. We have never asked for any advantage for our folks, but we would just as soon they are not put at a disadvantage in this way.  Our membership has been a partner to Adobe for more years than Kinko’s has.”

AlphaGraphics CEO Kevin Cushing pointed out that AlphaGraphics was the first in the market to adopt early Adobe web-to-print strategies, then called Adobe Transit and later Adobe Job Ready, adding, “I am certain that the balance of the industry has contributed far more to Adobe’s profit and margins than Kinko’s has, and the way a company treats its loyal customers speaks volumes about the philosophy of its leadership.”

While agreeing that Adobe made a significant strategic error in bringing this deal to fruition, ICED President Bob Metzger had this advice for printers:  “On the opposite side of this, has Kinko’s done a good job with e-commerce so far? No. Is their system that easy to implement for the typical user? No.  If you have mechanisms in your shop that are easy Web-to-Print solutions for your clientele, I would think you would have some workarounds.  Granted, you can’t argue with the force of an Adobe and the exposure on PDF is worldwide and enormous.  But if you have developed an easy-to-use solution for your clientele, even something as simplistic as PagePath MyOrderDesk, you can do the same thing and put that information on your client’s desktop, making it easy to do business with you.  It is not exactly the same, but people are going to do business with people they know, like and trust.” 

Meanwhile, the industry is awaiting a resolution to this “insult” from Adobe, and most industry leaders are confident that a resolution can be achieved.  Allegra’s Carl Gerhardt sums up the sentiment by saying, “The first thing we need to do is to take the emotion out of it.  If Adobe is willing to play ball, then we need to be proactive and help them find a way out of this.  They have some contractual issues with Kinko’s, and we have no way of knowing what those are.  The other more aggressive route would be to file legal action with the FTC on the basis of restraint of trade and unfair competition, which, if necessary, the industry ought to do.  But there needs to be a meeting of the minds first to see if there is a resolution short of that.”

Cary can be reached via email at cary@sherburneassociates.com, online at www.sherburneassociates.com and by telephone at 603-430-5463.

WTT Full Disclosure Statement: Cary works with numerous companies within the industry and may have ongoing projects with companies named in her articles. These companies play no role in the direction of her articles. The views expressed by our contributing writers are their own and may not reflect those of WhatTheyThink.com. WhatTheyThink.com may have formal business dealings with companies named in Premium Access articles. However, these relationships play no role in the editorial content at this site. See our complete editorial policy by clicking here.