Production Inkjet: Growth Trends, Main Applications, Sales Value Proposition
With the 2016 Inkjet Summit looming just around the corner (April 18-20, to be exact), we wanted to provide some tidbits of analysis from our Inkjet Summit Advisory Board members, who will be on hand in Florida to provide insight and guidance in their roles as speakers and facilitators. With the annual event now entering its fourth year, this represents a critical juncture for printers who need to become well-versed on the past, present and future trajectory of continuous-feed and cut-sheet production inkjet technology.
After eight years of rapid growth and success of single-pass production inkjet printing systems, the technology has proven to be highly reliable and profitable for what we may now call relatively low ink-coverage, standard inkjet-receptive paper stock. In 2015, the journey commenced to be able to print with higher amounts of ink coverage, on offset coated and uncoated papers.
Less promoted was the shift toward less productive, lower-entry-priced hardware systems, yet this looks like it will be the most widely adopted segment of production inkjet technology to date. We’re starting to see growing user interest in monochrome-only inkjet production printers, as well as entry-level, continuous-feed and cut-sheet production printing technology.
What all of these have in common is the use of single-pass inkjet technology, where paper passes underneath the fixed printheads only once to lay down all colors required. This provides the magical productivity upwards of 5-10x the throughput of toner-based systems, using fewer moving parts, at lower running cost.
With the expansion of production inkjet printer product offerings, in terms of application addressability of paper stocks at one end of the spectrum and entry-priced systems at the other end, we are now at a stage in the market where the technology is poised to gain critical mass. The efficiency benefits enabled by inkjet technology are now starting to disrupt the old business models of print.
The business model change is where the real market impact of production inkjet technology will be felt in the coming years. Many of the early production inkjet printer adapters have already witnessed and felt this. The printing industry has been slowly moving on a path from high-volume, low-value print to lower-volume, higher-value print. This journey is impacting how print is purchased (and sold).
Production inkjet technology meets the expectation for higher-value instant response, but this is often coupled with smaller, more frequent job orders, and inevitably with a more limited range of choice (it becomes impossible to efficiently offer 500 types of finishing, 1,000 types of paper stock, etc., while meeting rapid turnaround and smaller job lengths). This puts tremendous pressure upon traditional sales methods of print providers, where historically the quest has always been for even larger job orders, often with unlimited choice of options.
To successfully integrate production inkjet into one’s print operations, the most critical aspect is not a plant’s size or resources, but rather its ability to adapt its business models. The culture change required can be daunting and requires leadership from the very top of the company. Production inkjet technology is proven and its capabilities are rapidly expanding. Now, it becomes a matter of time and choice for those who have yet to adapt.
Over the past several years, the growth in the production color inkjet market has been nothing short of astounding. Next month’s fourth annual Inkjet Summit will, I expect, be the largest and best-attended thus far.
Suppliers in the market are delivering new equipment technology options at more affordable prices, more substrates and enhanced workflow solutions. The Inkjet Summit has become an ideal place for in-plants, commercial printers and service bureaus to obtain information and insight from industry experts as well as their peers about the challenges and opportunities associated with implementation.
The Impact of Inkjet
With a wide array of options available, inkjet will continue to fuel growth in the digital printing marketplace. According to InfoTrends’ 2015 “Global Production Printing and Copying Market Forecast,” worldwide digital production color volumes totaled about 399 billion impressions in 2014. By 2019, InfoTrends expects them to approach 827 billion. In addition to highlighting the upward growth trend of digital printing, the chart (Figure 1) illustrates the impact that high-speed inkjet is expected to have on the market. Production color inkjet accounted for 42% of total production digital color volume in 2014, but this value will rise to 57% by 2019. This occurs even as cut-sheet digital color is growing at a healthy rate. This growth can be attributed to new applications as well as the migration of offset volume to digital color based on significant improvements in speed, quality and cost.
The growth in inkjet will be driven by the conversion of production print volumes from electrophotographic monochrome presses as well as an application migration from offset to digital technologies. The key to success will be an application focus, where service providers are able to deliver a clear value proposition for the ultimate print buyer. InfoTrends’ “Digital Production Printing Application Forecast” highlights the key applications where digital pages are expected to grow (Figure 2).
Service providers must educate the market about the fact that inkjet technology is much more than just an offset replacement — it is creating the ability to re-engineer applications to add a new level of value. Inkjet enables a different way of thinking for service providers and end customers alike.
Examples of inkjet’s impact on the market abound. Books can now be affordably manufactured in a quantity of one with zero inventory for the publisher. Catalogs can be cost-effectively versioned or printed with personalized covers and special offers to drive sales activities for online and brick-and-mortar locations. Transaction documents can be blended with direct marketing content to generate documents that get noticed, get read and prompt the recipient to take action — all while reducing postal costs. These transaction documents can also be produced in a white paper workflow to eliminate the cost of preprinted forms. Direct mail can become more personal and relevant to each individual consumer, and publications of all types can have regional editions.
The Bottom Line
This year’s Inkjet Summit will provide a great opportunity to learn about the very latest technological updates. Even more importantly, it will equip you with the insight you need to identify the applications that will help you re-tool your value proposition.
It seems that everywhere you look, technology is getting smaller (except for the iPhone 6) and production inkjet is no exception. Most recent inkjet introductions in transaction printing have been geared to provide smaller organizations with smaller devices and smaller price tags.
Since the majority of mid- to high-volume transaction print shops have already transitioned to inkjet, manufacturers have turned their attention to the many for-profit and in-house operations still using cut-sheet toner devices. This market requires a compelling cost/productivity model, and the benefits must be attainable at a cost well under $1 million. In addition, many of these enterprises have space constraints that their larger competitors don’t face.
While small transaction print operations don’t have the full range of choices that other markets enjoy, offerings have expanded to include the Océ ColorStream 3000 Z, Pitney Bowes AcceleJet, Ricoh InfoPrint 5000 MP and Xerox Rialto 900. From a price perspective, the Canon Océ VarioPrint i300 also fits this market, but it misses the target by a wide margin on footprint. On the other hand, as a cut-sheet device, it supports a wider variety of applications than roll-to-roll or roll-to-sheet models.
We’re likely to see competing cut-sheet announcements at drupa since this is a compelling option for in-plant printers and smaller service bureaus with a mix of job types.
Lucky companies shopping for inkjet in 2016 get to enjoy more than just a lower price tag; they get to skip over many of the challenges that early adopters faced, such as a lack of suitable papers, mediocre color quality and scarcity of service personnel who understand inkjet. The manufacturers’ focus on expanding into packaging and commercial printing has yielded benefits to the transaction printing market in the form of better ink quality, more paper options, higher resolution output and the choice to go cut-sheet or continuous.
While entry-level transaction print devices might be getting most of the R&D attention in this segment, that doesn’t mean that manufacturers have forgotten about their large clients who are churning out inkjet pages at a 22% CAGR (source: IT Strategies). Since more pages means mutual success, companies like Canon, HP, Ricoh and Xerox have created intensive business development programs to help their customers grow inkjet volumes.
And whether you’re at the top end of the inkjet volume threshold or just breaking in, growing volumes is what it’s all about. So look forward to more and better options to grow your business with inkjet in 2016 and beyond.
There is no doubt that high-speed inkjet has been a game changer for the printing industry. If you have not yet embraced high-speed inkjet, you need to take a serious look. If you have inkjet, it can and should be a game changer — and certainly something to lead with when talking with customers and prospects.
Whether you are a commercial or transactional printer, inkjet can be a powerful selling tool and open doors to new business.
Remember: It is not simply another digital printer or press but most likely the future of your business.
Commercial Printers: Significant improvements in print quality over the last three to five years and an expanding myriad of paper stock and inks make migrating certain applications from the press to inkjet both operationally and economically feasible. Although application migration can lead to a significant reduction of both obsolete stocks as well as warehousing costs, the real story for commercial printers evolves around increased revenue opportunity.
Inkjet provides two big additional benefits for commercial printers. It enables them to accept shorter run jobs that were not cost-effective in the past, with both new and existing customers.
In addition, full-color variable data provides a great deal of expanded application capability enjoyed predominately by transactional printers in the past. Variable data and personalization add value and command a premium. They do require a commitment and investment in hiring people who understand data. But it will pay big dividends.
The value proposition for your customers? Reductions in obsolete stocks and warehousing costs, the ability to print shorter jobs cost-effectively and the opportunity to add value with variable data. All great selling points.
Transactional Printers: For transactional printers that were the early adopters, the technology represented major savings from both a cost and operational perspective: the elimination of preprinted forms, reduction and/or elimination of obsolete stock and reductions in warehousing costs.
As bills, statements, direct mail and policies increasingly became more complex, advances in the technology enabled true “production speeds” expanding print windows, increasing production capacity, reduction in hardware footprint and better support of service-level agreements (SLA).
The value proposition for your customers? The elimination of preprinted forms, obsolete stock and reduction in warehousing costs. The increased throughput capacity can shorten print windows and better support SLA.
If one assumes the evolution of the technology, look for higher print quality, advancements in ink technology, expanded media capabilities, workflow and color management, and lower operating costs.
It is a great time to be part of the inkjet revolution. PI