FedEx has announced that it will pay $891 million to cross-out the Kinko's brand name on its FedEx Kinko's storefronts, and replace it with the name "FedEx Office."
"The FedEx Office name better describes the wide range of services available at its retail centers and takes full advantage of the FedEx brand long recognized for excellent customer service," said the company's spokesman.
So let me figure this one out: $891 million to get out of the brand name that FedEx paid $2.4 billion to acquire in 2004.
Let's hope the storefront real estate was worth it.
The idea that small or independent businesses might wholly outsource their office functions -- record keeping, printing, sending materials, and receiving them -- is a powerful business proposition. I bet there's money in it, and I know I wasn't alone if relying on Kinko's for volume printing and, more recently, dropping off FedEx packages 24/7.
But Kinko's never figured out the bigger business opportunity, and why should we expect FedEx to do so?
I'd say a good hunk of your average retail location is chocked full of impulse buy garbage, not merchandise truly relevant to the small or independent business user.
Lots of the incremental paper-based work is getting distributed, as printers get cheaper, etc. Also, every year brings another class of folks who don't remember ever going to a store to buy an LP, let alone receiving a paper memo or reading a report anywhere other than on a computer monitor.
So FedEx is going to make these locations more than glorified drop-off boxes? It's in the transportation racket, last time I checked, At some level, dubbing stores "FedEx Office" is kind of like deciding to offer "FedEx Floor Polish." Or, maybe better put, suggesting that an ice cream parlor could have a rationale desire to own its own dairy cows.
I say this is a perfect example of the risk in the Irrational Exuberance of Brands.
FedEx will have dropped over $3 billion on Kinko's before the branding transition (and Kinko's name) is done. I sure hope it got some brilliant insight into doing whatever it is the company wants to do at retail...and just couldn't make happen because it was being so terribly held back by the Kinko's brand name.
Actually, the rebranding program could give all those FedEx Office outlets something to do. We're talking about makin' lots of copies.
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