Labor and Data Requirements Are Driving Inkjet Adoption
With more than 350 attendees and sponsors, the seventh annual Inkjet Summit was a resounding success. This hosted event, which IT Strategies has chaired for the past six years, was a success because it brought out nearly 100 printing executives who had a strong interest in acquiring production inkjet presses, but had yet to buy one.
Tighter deadlines, shorter print runs and higher job frequencies are pushing print providers to look at inkjet technology even though for many a $1+ million investment remains daunting. But we’re reaching a stage where opposing forces, requiring more automation (and less labor) and a demand for more flexibility (to manage shorter and more frequent runs), demand investment.
What is becoming clearer is that the old ways of doing business are becoming less and less tenable (see Figure 1). In the past, the printing and finishing aspects of a printing operation are where all the time and effort was spent. Today, and certainly heading into the future, less time is being spent on printing and finishing (due to shorter run lengths) — and more on data management and workflow preparation. Some sophisticated jobs these days can require 80 hours or more of data analytics/preparation for an eight-hour print job.
This trend is causing a shift in labor requirements, as print providers can’t support as much labor on the print and finishing side because this is the low-value part of the work, but require more IT and programming jobs, which is rapidly becoming the high-value part of the work. Inkjet would be the key to leveraging the power of data, since the print volumes still extend well beyond the reach of digital toner printing systems.
New Print Sales Paradigms Emerge
Simultaneously to the changes in print workflow, the process of selling print is also changing rapidly. The legacy “book of business” model is becoming out-muscled by either lower-cost (Web-to-print) sales, or higher-value-add (new consultative/programmatic account) sales.
Web-to-print sales business models work well for consumers and small businesses willing to accept a minimal range of print options. The value-add is coming from the consultative sales approach, where the account representative solves a problem (driving higher sales and retaining clients) using print and data — shifting the conversation away from the lowest cost of print to a desired outcome for the customer.
Consultative sales opportunities, for example, include selling more color in transaction statements to enable a utility to more clearly provide information or instructions to a customer, thereby reducing telephone support costs. It can also be used in the publishing industry to reduce costs by moving to a “zero” inventory model, or to re-publish “exclusive” old editions from decades ago as collectible, premium publications.
And, most often, consultative sales are deployed for direct mail applications, shifting from a one-time print purchase to a quarterly or year-long, multi-job campaign. The use of postcards is also back in strong fashion, in part driven by U.S. Postal Service discounts.
A key takeaway for 2019 Inkjet Summit attendees was data showing the overall print revenue trends (see Figure 2). While overall retail revenues for print are in decline (driven by a decline in offset demand), expenditures on inkjet output grew about 67% between 2008 and 2018 — and continue to grow. The accelerating revenue growth of inkjet is clearly shown in Figure 2, leaving little choice but to invest in inkjet if one wants to grow.
There were five clear takeaways coming from the attendees:
- A clear role and need for production inkjet technology,
dictated by rising labor costs, automation pressure and the desire to leverage data;
- A second wave of production inkjet adoption is coming: the risk of not investing has become too great;
- The sense that inkjet growth could be much faster than predicted;
- Profit will come from prudent/timely/relevant use of data, not from the most beautiful print quality; and
- It’s not just about investing in an inkjet press — it is about investing in an entirely new pre-to-post process.
Inkjet Adopters: Truth from the Trenches
Some of the most telling experiences from printer panelists who had already adopted inkjet can be ascertained from the following condensed comments:
- “Transaction is all about inkjet automation, and automation is complicated.”
- “Transaction can’t survive without middleware; there is too much legacy in our workflow.”
Direct Mail Printer:
- “Don’t let the sales reps in until marketing has done its job preparing them for a warm call (rather than a cold call).”
- “If it sounds too personal, that’s probably not what you want. Make it relevant.”
- “Every time a pressman retires we take out an offset pressline.”
- “We are within sight of a tipping point from offset to inkjet in trade books.”
General Commercial Printer:
- “You can’t build an inkjet business on job work.”
- “Don’t make the new look like the old — or else the client will ask, ‘where are my savings with this new technology?’”
It was clear to the attendees that production inkjet serves the competing needs for automation, volume and flexibility. Inkjet has proven reliability; upgrade promises are being delivered upon; and manufacturers offer more choices than ever.
Most importantly, inkjet technology opens the door for new opportunities, including the ability to create new data-driven applications, while concurrently automating more of the workflow at a time when recruiting labor is becoming ever more challenging.
The second wave of inkjet adopters appears to be forming, promising a bright future for inkjet technology and for those who leverage its capabilities. The next Inkjet Summit will be held April 20-22, 2020, in Austin, Texas — just ahead of drupa 2020.