FedEx had just acquired Kinko’s with the stated purpose of fueling its retail outlet expansion and driving growth of its transportation services. The combination “leverages the historical strengths of both companies, while powerfully redefining the future of the business services marketplace,” Mr. Smith explained to the group. Kinko’s would give FedEx access to those individuals and businesses lacking a regular pickup from a FedEx driver. FedEx would gain access to the copy chain’s mainstay — the high-margin, small and medium-sized businesses that FedEx had long coveted but could not reach. With Kinko’s as the front end, Mr. Smith could plug in FedEx’s massive back end and go after every business customer on the planet, large and small.
That’s the near-term plan, but as Mr. Smith’s message to the Kinko’s troops suggests, his vision for FedEx never ends with the near term. Although Mr. Smith and FedEx won’t confirm or deny (he was unable to speak to strategy+business for this article), it’s clear that FedEx Kinko’s can be much more than a copying and delivery service. Given its expanding web of storefronts linked by a super-high-speed digital network, FedEx Kinko’s is perfectly situated to take advantage of the rapidly developing 3D printing technologies that can already produce all sorts of small products. FedEx Kinko’s could become the pickup point for anything from print-on-demand books to parts for automotive engines and electronics. It’s the logical step for a company whose core business is getting stuff from here to there.
All in good time, but Mr. Smith’s first order of business when FedEx closed the Kinko’s deal was to convince the crowd staring him down in the Westin ballroom to come on board with him. Sitting in the front row that day, Tom Leverton, then a Kinko’s vice president, remembers how Mr. Smith and Kinko’s CEO at the time, Gary Kusin, stood side by side beneath digitally projected images of the two companies’ logos. “Today we move forward by unveiling a new brand,” said Mr. Kusin, who before coming to Kinko’s in 2001 had done stints as CEO of a cosmetics company, a software retailer, and HQ Global Workplaces. Then in a bit of corporate theater, the lights went down and the logos slid together to reveal the newly combined FedEx Kinko’s brand, as Mr. Smith, standing below the merging logos, draped his arm around Mr. Kusin’s shoulder. Mr. Leverton, who worked on the rebranding implementation and who is now senior vice president of products and services for FedEx Kinko’s, turned around in his seat to watch the reaction. There was a pause while people soaked in the message — Kinko’s would not be gutted as they had feared — and then the hall erupted in raucous clapping and relieved smiles, the biggest among them Mr. Leverton’s. “Once I heard it, I knew this merger was going to work,” he says. “We had the hard-core team members behind us, and without their support, no amount of planning at the top would make up for that.”