SECURITY PRODUCTS: Locking Down this Market Is a Sure Bet

Office World News, Mar/Apr 2005

What do you think of when you hear the word "security"? Some might think network security. Others might think intruder protection. But if you are an office products dealer, only one thing should cross your mind: dollars!

In today's age of computers and technology, the mishandling of personal information - names, addresses, social security numbers, credit card account numbers, etc. - can have serious consequences. Identity theft is one of the fastest growing cri mes in the United States. You can look at anyone's statistics - the Federal Trade Commission, Cartner Research, etc. - and see that millions of consumers fall victim to this crime annually. Never before has the need to protect information been more important.

Uncle Sam is not blind to this growing trend. In recent years the federal government has tried to protect the privacy of its citizens with such laws as the Health Insurance Portability and Accountability Act (HIPAA) and the Fair and Accurate Credit Transactions Act (FACTA). These regulations, designed specifically to secure personal information, are suddenly making security related products hot items.

Most of you, or at least those that operate within the healthcare market, are familiar with HIPAA and the precautions healthcare facilities must take to meet compliance. The possibilities for dealers to capitalize on this law are seemingly endless: shredders, fireproof safes, secure filing systems...you name it.

"Our life selling these items has been made a lot easier since the larger entities have embraced HIPAA and other regulations aimed at protecting personal information," said Tony Ellison, president and CEO of Shoplet.com. "More now than in the past, the government, Healthcare and commercial entities are all buying shredders and other such products to help protect themselves. This has created a vast opportunity for the dealer community."

Since 2002, Shoplet.com has seen an almost triple-digit increase in the number of shredders sold.

Manufacturers are also well aware of this potential market. Smead, for example, put together an informational brochure for anyone that wants to learn the basics of HIPAA (www.smead.com/images/pdf/HIPAA.pdf). And you can bet your bottom dollar, if independents don't take advantage of this market, the Big Box players will (www.staplescentral.com/hipaa/HIPAA_2003_SBA.pdf).

Despite the lack of compliance on behalf of much of the business community, HIPAA is relatively old news. The new kid on the block, however, is FACTA. Although FACTA was issued in December 2003, the "disposal" portion of this regulation - the FACTA Disposal Rule - will take effect this summer, June 1 (www.ftc.gov/opa/2004/11/factadisposal.htm).

The disposal rule will require all businesses - and to a lesser extent, consumers - to "take reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal."

"HIPAA resulted in a huge surge in the sale of shredders and FACTA is even more broad-based," said Cindy Andreoli, director of marketing and communications with GBC Commercial and Consumer Group. "HIPAA was applicable to hospitals, doctors offices and pharmacies, where as FACTA touches almost everyone. Even if you only employ one person, you can be held liable if you do not destroy personal information before it is thrown away. I anticipate the swell of sales from FACTA to surpass even the surge we experienced for HIPAA."

If you thought shredding was a hot ticket before, wait until it gets closer to the June 1 deadline. As more media outlets begin to pick up the story much the same way April 14 was engrained as the HIPAA deadline consumers and businesses will take an active interest in products to assist in their disposal efforts.

So the next time you hear a conversation about "security," if your eyes don't glaze over with dollar signs, you are not doing what you can to penetrate this market.