FedEx to use Kinko's stores to offer e-services to enterprise customers

Meanwhile, UPS is beefing up its Wi-Fi tests at retail outlets

FedEx Corp. sees the electronic document delivery services, Wi-Fi Internet access and videoconferencing capabilities that are offered at 1,200 retail outlets of Kinko's Inc. as a natural complement to its air and ground delivery services, according to FedEx spokesman Jim McCluskey.

Memphis-based FedEx announced plans on Tuesday to acquire Dallas-based Kinko's for $2.4 billion.

Fred Smith, chairman of FedEx, said in a statement that the Kinko's acquisition will allow both companies "to take advantage of growth opportunities in the fast-moving digital economy." McCluskey said the acquisition makes sense, since it will allow FedEx to "push information electronically" for its customers.

FedEx said it will use the Kinko's retail outlets to broaden its offerings to large corporate customers as well as small and midsize businesses. It will offer large customers document management services and outsourced copying. FedEx also said it intends to offer smaller businesses a full range of services, including computer usage, copying and printing.

The company said it wants to use the Kinko's outlets to provide an office on the road for mobile workers who need either wired or Wi-Fi Internet access, as well as videoconferencing and other business services. Kinko's provides paid Wi-Fi Internet access through Bellevue, Wash.-based T-Mobile USA Inc., and by April it plans to have 1,000 outlets equipped with the service.

Meanwhile, United Parcel Service Inc., which acquired the 4,000-outlet Mailboxes Etc. chain in 2001 for $200 million and rebranded most of them as The UPS Store, plans to widen its test of Wi-Fi Internet access at those stores to provide electronic services to its customer base (see story). The UPS Store plans to test the use of Wi-Fi to support networked copying and printing for customers in the first quarter of this year, according to Nick Costides, retail group technology manager at Atlanta-based UPS.

UPS started a small-scale test of Wi-Fi access at 66 UPS Store locations in Chicago in September. Costides said UPS plans to expand the test to several other U.S. markets in 2004. UPS also plans to test Wi-Fi Internet access at two Mailboxes Etc./UPS Store locations in the U.K. this year. This includes a free-standing store in Cambridge, England, to test the college Wi-Fi market, and an outlet based in a J. Sainsbury PLC supermarket. Costides didn't know the location of the Sainsbury test store when reached today.

UPS also intends to test Wi-Fi-based network printing in both the U.K. and Chicago, he said.

The Kinko's acquisition and Smith's emphasis on using the company for growth in the digital economy brings FedEx full circle from its first stab at electronic document delivery, the FedEx ZapMail service, which was launched in 1984 at a cost of $1 billion. At that time, FedEx planned to deploy a nationwide network of industrial-strength fax machines at its hubs interconnected by a private communications satellite network.

The network was expected to deliver documents electronically to FedEx hubs, with documents printed out and then delivered by couriers. FedEx shut down the ZapMail service in 1986 when the boom in cheap and reliable office-based fax machines eliminated any reason for customers to use FedEx as the middleman for fax communications.

Copyright © 2004 IDG Communications, Inc.

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