Can the print industry survive digital disruption?
“Companies rarely die from moving too fast, and they frequently die from moving too slowly” Clayton Christensen
With a business model predicated on selling hardware and consumables, how can the print industry innovate in a market which may be rapidly reaching its sell by date?
There has been much talk about disruption in the print industry, particularly with the latest acquisition of Samsung’s printer business by HP, where HP boldly claims it will disrupt the copier market. The market has seen a wave of consolidation – HP now operates as two separate companies, Xerox has separated its technology business and its service business, now called Conduent. The Foxconn Technology Group acquired Sharp in August 2016 and Lexmark’s acquisition by a Chinese consortium led by Apex Technology is now approved. So what does the future hold for the print industry, one that is hardware-centric and reliant on the printed page? Can it truly reinvent itself for the digital age?
Surviving the digital onslaught
Change or die has long been the mantra in a technology landscape that is facing a range of disruptive forces – smartphones, cameras, sensors, social media, the cloud, analytics. Emerging technology such as 3D printing and Artificial Intelligence (AI) are poised to create yet more disruption, while new models of service consumption have enabled companies such as Uber and Air BnB to re-write the rules of the markets they have entered.
The print industry is already feeling the force of the digital age; information is increasingly read, shared and distributed online rather than on paper. As with any legacy industry reliant on a huge hardware installed base, manufacturers must find new areas of innovation whilst protecting their core business. Add to this the ongoing revenue stream through consumables, and it is obvious that manufacturers face the dilemma of finding new growth areas for printing whilst making their products relevant in today’s digital age.
If we take it back to basics, print is a delivery mechanism for sharing and delivering information and content. The print industry is not alone in the mammoth task of reinventing a traditional platform for content delivery – think TV, film, music – where formats such as CD and DVDs are being killed by the Internet and digital streaming subscription services. For instance, as Netflix was moving from DVDs to streaming, its CEO, Reed Hastings, warned of the danger that organisations face in “failing to look for new things their customers want because they are afraid to hurt their core business”.
Yet print is far from dead. Print’s tangibility and durability; its credibility and trust can set it apart from the noisy cluttered online landscape. Research has shown that readers are more likely to retain information on printed material leading to higher engagement levels. Print offers our undivided attention, rather than the multitasking experience with online content.
Although print is not dying any time soon, manufacturers must connect to their customers in more meaningful ways. This means creating products and services that leverage their heritage in print but also connect seamlessly into the digital and online world.
Quocirca believes that print manufacturers must exploit the following opportunities:
- Adapt to the “as-a-service economy”. The consumer preference for services over products and subscriptions over purchases is permeating into the business market. This is driven by increasing customer demand for flexibility that will allow them to take advantage of new technologies. With an as-a-service model, customers are not burdened by significant upgrade costs and can more accurately estimate the on-going cost of access to technology. Managed Print Services (MPS) is already an established service model in the market, offering a lucrative recurring services revenue model along with increased customer retention long after the printer hardware sale. While the MPS market is relatively mature in the enterprise space, there are further opportunities to tap into the largely under-penetrated SMB market with “print-as-a-service” offerings. For the channel, digital services around printer device diagnostics and predictive/ preventative maintenance have significant untapped potential. MPS vendors should drive further innovation in their engagements around cloud delivery, security and mobility. These are key enablers, not only for the as-a-service economy but also digital transformation.
- Drive the digital transformation journey. Despite talk of its demise, paper remains a key element of the connected and collaborative office workplace and still plays critical role in the business processes of many organisations. However, paper bottlenecks can hinder business productivity and efficiency. Print vendors are well positioned to connect the paper and digital worlds and are developing stronger expertise in workflow solutions and services. In many cases, the leveraging of investments in smart multi-function peripherals (MFPs), which have evolved to become sophisticated document processing platforms, provides vendors with an opportunity to maximise the value of their hardware offerings. Vendors need to change legacy perceptions of their brand and be accepted as a trusted partner in the enterprise digitisation journey. Business process optimisation and workflow capabilities will become a key point of differentiation for vendors in the industry, requiring a balanced hardware, software and service portfolio.
- Leverage Internet of Things (IoT) technologies. All printers are things and the connected smart MFP is part of the IoT landscape. Vendors can exploit the enormous data generated to monitor actual customer product and service usage. This data enables manufacturers to deliver better service performance through predictive data analytics (think proactive service and supplies replenishment) and by collecting information about customer usage of products or services, vendors can improve product design and accelerate innovation. Developing strategic partnerships with open technology vendors can also pave the way for the seamless integration of printers/MFPs with mobile devices and drive the development of a broader mobile solutions and services ecosystem.
- Expand high value customised print services. Many of the traditional print vendors can leverage their own or third party hardware (including print, visual and display signage technology), services and tools to develop cross media channel communications. Think interactive print above and beyond Quick Response (QR) codes as a way of connecting off-line and on-line marketing messages. The print industry must therefore become more aligned to brands – for instance Coca-Cola’s European “Share a Coke” campaign used HP’s Indigo digital press technology to create personalised labels. Meanwhile, the use of augmented reality (AR) technology is being used alongside print media to create an immersive and engaging interaction with the reader. This requires an AR app (such as Blippar, Layar or Augment) which uses image capture technology to launch interactive content from a smartphone or tablet. Such interactive print solutions bring print to life, for instance pointing a smartphone at a billboard ad or printed magazine can generate a movie trailer, 3D interactive model, enhanced photographs that move and speak and so on. One print vendor that has made progress in this area is Ricoh, with its Clickable Paper solution.
The print industry is not immune to digital disruption. Print manufacturers have thrived for many years by focusing on their core engineering competencies to create competitive advantage. Many have focused their efforts on moving into the profitable managed print services (MPS) market through both acquisitions and refocusing business models. However, as hardware and MPS become increasingly commoditised, software competence will be one of the most important differentiating factors for the industry.
As they face converging market forces, with the right vision and proposition, print manufacturers can play a role in the digital world. Each vendor will fight the battle differently but the smart players will recognise that to adapt and thrive, they must become more open, expand partnerships outside the industry and continuously innovate. This means creating new products, services and/or channels and engaging customers, partners and employees in new ways.
Manufacturers face strategic choices with their response to digital disruption and how they drive relevancy and customer engagement. Ultimately the question remains, is the print industry ready to disrupt itself?
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