Transaction Printers Entering Inkjet Market Should Place Value Over Volume
For companies that consider themselves transaction printers, it's important to understand where the competition is coming from and how to position your business in the most profitable way. On day four of the Virtual Inkjet Summit, Elizabeth Gooding, president of Inkjet Insight and a member of the Inkjet Summit advisory board, addressed this issue and how the path to evolution is essential.
Gooding started out by describing the current transaction landscape. Surprisingly it is the smallest segment in the printing ecosystem, she explained. In an overall market of 48.6 trillion A4 pages, transaction printing only makes up one-half of 1% of that. However, the opportunities are still plentiful because transaction printing has remained steady as an essential service.
One thing that is certain is that the printers that are utilizing inkjet technology have a clear advantage.
“Companies without inkjet are getting squeezed out," Gooding said. "It is becoming a major competitive factor."
That's because only 25% of transaction printers have inkjet capabilities, but those printers control 57% of the page volume. Similarly, in direct mail, you have between 15% and 20% of the printers operating inkjet equipment, but with control of 40% of the page volume.
"You have a minority that's controlling the majority of print."
Three Ways to Grow in a Declining Market
Looking past the current landscape of transaction printing, Gooding explained that there are three distinct ways to grow: eat, be eaten, or evolve.
Because your competition is always evolving, it's imperative to evolve, which for some companies means expanding outside of your "core" services.
In a recent study reviewing what printers view as their core services, among the 60 printers that consider themselves "transaction printers," only 28% of those companies reviewed reported that they earned more than 80% of their revenue from transactional print. Further, 58% earned more than half of their revenue outside of the transaction segment.
As more printers branch out, the competition for transaction printers widens. Many commercial printers are getting into inkjet and want to find ways to keep their devices busy, so some are moving into transactional print to achieve that. To meet the competition, transaction printers need to learn to fully leverage color, Gooding said.
“It’s not business quality color or good enough quality color, it’s offset quality color or better," she added.
One of the first steps to ensure that your color is up to snuff is to make sure to analyze your device and media.
“If you’re not already profiling and optimizing color on the papers you support, get some help," Gooding suggested. Analyze what you have and make a decision to upgrade your device or media, or both.
Production inkjet is a competitive advantage, but it has to make sense for your business. She explained that OEMs have drastically improved quality of their products during the past 12 to 18 months. Upgrades could include jetted or anilox precoating, sophisticated inks, or changes in printheads, but you need to weigh out the cost benefit for your business.
Can you expand into new markets? "Is an expensive ink or a new precoating worth the cost if it opens up new media [options]?" she questioned. Or should you stick with an existing press?
No matter what you decide, you need to have a plan. Gooding explained that there are multiple ways to evolve, including through acquisitions or evolving independently. Regardless of the decision, focus on what your customers value and how to meet those demands.
“Inkjet is a personalization powerhouse," she said.
It can be used to stand up to the competition if printers embrace color; learn about data science; do more for existing customers; drive more profitable pages; and help clients use less paper.
Value Over Volume
Gooding stressed the importance of positioning your inkjet business with customer-focused solutions. Think about potential value beyond the printed page:
- faster onboarding for customers — software can be a great solution for this
- standard, repeatable vertical applications to contain costs
- client-facing dashboards and more self-service options
- an enhanced testing environment to keep down costs and reduce waste
- develop analytics models as part of a sales process or paid-service
- leverage and protect data
For companies just entering the inkjet space, or those considering doing so, it might seem like a lot to think about, but Gooding says you don't have to do it alone.
“There are a lot of ways to evolve; you don’t have to do everything yourself," she counseled. "If you’re already an inkjet shop, you can partner with companies in other segments, to cross-sell your capabilities and they can cross-sell yours.”
Just remember that your value should be more than just the product you offer. Gooding pointed out that for two companies with the same equipment, they can still compete based on their workflow, their service mix, and their overall customer experience.
“Use inkjet to do things that you and your customers can’t do now. Use inkjet to evolve your business model for the better. It can enable you to do something different and new, or do what you do now, just a little more efficiently," she said. "But think about your business model in terms of where you can add value to your customers, rather than fitting into any particular industry or segment. You don’t have to identify as a transaction printer; you can be more than that.”
Segments are changing, Gooding pointed out, closing out the session. “The bottom line on how to compete with inkjet: use it to get more customers and to do more for the ones you have. And then keep doing it."