Why Inkjet Will Lead the Industry’s Recovery
When it finally becomes possible to say the printing industry has put the COVID-19 pandemic entirely behind it, production inkjet will be recognized as one of the main drivers of the rebound. Though the process accounts for a relatively small percentage of all pages printed, its share is growing, and inkjet printing has emerged as the method best suited to producing the kinds of pages that printers’ customers will go on wanting to buy.
This is the consensus among the four senior industry analysts — Marco Boer (I.T. Strategies), Pat McGrew (McGrew Group), Barbara Pellow (Pellow and Partners), and David Zwang (Zwang & Co.) — who serve on the advisory board of the ninth annual Inkjet Summit, the industry’s highest-level conference on production inkjet technology, applications, and market outlook.
In advance of the event, which will take place from July 26-28 at a new venue in Austin, Texas, the analysts discussed why they think inkjet is well-positioned to lead the recovery from a body blow that left all sectors of the industry reeling.
A Fortunate Area
Inkjet was “one of the more fortunate areas” to be in during the 2020 downturn, according to Boer, whose company predicts a 15% CAGR for inkjet pages produced from that year through 2024. But, he also notes that sales of inkjet presses in 2020 were 30% lower than in 2019, and says it is difficult to predict when the pace will fully pick up again.
“The rebound in pages is already happening,” Boer says. What’s not happening — at least not yet — is a corresponding rebound in inkjet equipment sales.
Few committed buyers of inkjet presses cancelled their plans because of the pandemic, McGrew reports. This year and next, she foresees the inkjet equipment market “slowing down a little bit,” as 2020 purchasers get to know their new presses, and others wait to see what the 2021-2022 business climate will be like.
McGrew also notes that plant closures during the downturn put used, but still highly capable, inkjet presses into the equipment marketplace, potentially impacting sales of new machines. A pre-owned inkjet press with a robust paper transport system, reliable heads, and an updated digital front end, she says, “will wind up somewhere. Someone will buy it.”
Nevertheless press advancements continue, making new devices optimal investments.
In inkjet’s favor, according to Zwang, is the fact that during the pandemic, people came to appreciate its advantages for the kind of short-run, quick-turnaround, less labor-intensive production that print markets have been shifting to.
“There seems to be more of an understanding that inkjet is here, that it’s good, and that people are finding ways to make the most of it,” he says.
That comes from identifying the applications to which inkjet production can bring the most efficiency and add the most value. One that has held up well during the pandemic, Pellow points out, is personalized, B2C direct mail, which she says “maintained a good cadence” of production, while B2B mailings declined. Another is linking CRM solutions such as Salesforce.com to printing workflows so a mailing is triggered when (for example) a new prospect is added to the database.
Data-driven applications like these “obviously play into the world of inkjet,” Pellow observes.
Where the Action Will Be
Uses for inkjet are expected to expand across the board. Boer says book printing should be an “incredibly strong” opportunity for inkjet, given supply chain trends that are re-shoring the production of books from overseas sources. He also sees demand for inkjet rising in graphic arts applications — defined as anything printed on glossy offset stock — now that the quality of the process effectively equals the quality of offset.
Packaging is the inkjet application to watch for growth in demand, Zwang advises. He says his conversations with converters tell him that “they are sold now and understand what inkjet can do.” He also predicts growth for the process in the commercial space, thanks to the arrival of less expensive cut-sheet devices — a development that could bring more in-plants into the fold, as well.
With this equipment, Zwang says, “they can test the waters without significant capital investment.”
Transaction printing with inkjet systems, on the other hand, may downshift both in page output and in machine proliferation. Although Boer describes volume in the segment as having stayed “remarkably stable” throughout the pandemic, he notes that it also faces a challenge in the concerted effort by banks and other financial institutions to “turn off paper” and persuade their customers to accept electronic alternatives.
McGrew points out that because transaction printing has built up a strong base of inkjet presses, equipment sales into the segment may consist more of replacements than of net new installations.
Cut-Sheet Comes into Its Own
As sales of new inkjet equipment regain momentum, there is likely to be more activity in sheetfed devices than in webfed systems. The analysts see this as a function of both price and availability.
When it comes to price, Boer says, “it’s a simple matter of acquisition cost and de-risking. If you are uncertain about what the future holds, you’re more likely to invest in a cut-sheet machine, because the acquisition cost is about half of a continuous-feed press.”
If the price is right for sheetfed inkjet, so is the moment. As Zwang points out, the first production inkjet systems were mostly continuous-feed presses, and sheetfed inkjet equipment didn’t come to market right away — a situation that left many commercial printers without a way to embrace the technology on their own terms.
“They all have cut-sheet analog equipment. That’s what they know, that’s what they understand,” Zwang says. The good news for this segment, he continues, is that “the amount of [sheetfed inkjet] options is increasing dramatically. That’s going to fill the bill and make it easier for people to make that change.”
McGrew senses the same kind of pent-up demand for cut-sheet presses. “The more sheetfed machines that come into the market and prove their reliability, the greater the market for sheetfed inkjet will be,” she points out. “Over the next 24 months, as we approach the next drupa (in 2024), sheetfed will be a bigger part of the story, because there are a lot of companies watching it.”
A Solid Workflow is Necessary
Although the analysts agree that choosing the right equipment and applications is essential to the inkjet business model, they also stress there is more to the equation.
“There’s no one application that, when you … put it on an inkjet press, you’re going to make millions of dollars,” says McGrew. “You need a really solid workflow to be successful, no matter what kind of press is running in your shop.”
This includes reexamining present routines — for example, imposition and finishing — to identify things a printing operation could be producing, but previously hasn’t offered. “There is a world of opportunity for organizations to dig into what they already own, and to look at the workflows and what they’re selling to their existing customers to figure out how they can extend their wallet share,” McGrew counsels.
“It’s time to get back to the basics” of marketing and customer service, urges Pellow, who believes that refocusing on fundamental business strategies is what principally separated the survivors from the casualties during the industry’s struggle with COVID-19.
Above all, it’s important for printers with inkjet capabilities producing any direct mail work to master data management. “It’s not the press, it’s what’s going to drive the press,” Pellow comments. Those investing in inkjet must realize that “it’s not just a press anymore — it’s got to be data, plus the press.”
This means making parallel investments in the staff and digital infrastructure needed to maintain customer data and prepare it for printing. Boer advises that with direct mail budgets staying flat and printers’ costs — especially for paper — increasing significantly, shops will find themselves printing and mailing fewer pieces. These, as a result, will have to be better targeted and more effective at generating responses.
“It doesn’t necessarily have to be 1:1, but it has to be more relevant and more versioned,” Boer says. “That plays very well for production inkjet printing for direct mail.”
Progress in Paper Performance
As Boer notes, paper costs are indeed going up: he reckons the increase was 8% in just the first four months of 2021. A consolation for inkjet producers, though, is that they can count on those stocks to print well on their inkjet presses.
“It’s been a long time since I’ve heard anyone whining about substrates,” Pellow says, adding that despite increased prices and short supplies, printers should be able to find the inkjet-compatible papers they need. Zwang agrees that “critical mass” of availability has been reached in compatible substrates, as well as in inkjet presses that can handle a range of commonly used stocks.
However, the best practice for buying inkjet papers continues to be trust, but verify. Boer says that although “huge progress” has been made in substrate compatibility, qualifying one stock for an inkjet press doesn’t guarantee that other stocks of the same type will print with the same good results. This is why inkjet printers should send all the papers they plan on running to their OEMs for evaluation, he advises.
“It’s not nirvana yet,” McGrew concurs, adding that inkjet printers who’ve succeeded with offset stocks understand the interaction of inks and papers “on an almost molecular level.” Her advice: test and qualify whenever you have the spare time to do so.
The analysts admit that some needless objections to inkjet remain to be cleared away: for example, that the ink costs too much compared with offset ink (although, according to Boer, inkjet ink’s percentage of the total cost of a job is declining as the cost of paper goes up). Other would-be adopters hesitate because they fear their personnel won’t be open to learning a new process (“I hear more concerns about staff when inkjet is brought in than about the technology itself,” McGrew confides).
Vacating the ‘Vacuum’
As Zwang notes, the progress of inkjet has not been helped by the “vacuum” of printing industry trade shows and conferences due to COVID-19. But now, with major live events — like the PRINTING United Expo in Orlando, Fla. — returning at last, he’s ready to resume explaining to printers in person why production inkjet is their best investment in “flexibility and survivability in the long term.”
Asked to state the inkjet imperative for printers, Boer responds, “In one word, it’s automation.” Labor shortages, he notes, present one compelling reason to automate print manufacturing with the help of inkjet, but the quest for automation shouldn’t stop at the press.
“Collectively, the more you modernize your entire end-to-end operation, the better off you’re going to be,” he notes.
McGrew says printers have a straightforward, dollars-and-cents rationale for wanting to embrace production inkjet: “You can make more money than you are making with whatever you are printing on today.”
“It’s not a green button, and it’s not a magic wand,” she explains. “But your cost of goods sold is extremely controllable. You can actually offer your customers options with an inkjet press for degrees of vibrancy in the color, depending on how you color-manage the file. You can’t do that with any of the other technologies,” McGrew emphasizes.
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