Home Blog 2020 An Economic Crossroads for Printer Manufacturers
Aug 31, 2020

The Future of B2B Printing

Subscribe to our blog

As is many times the case with industries in late stage business cycles, the commercial print industry, while significant in size, has been experiencing changing customer norms pertaining to print and digitalization. Since most printer manufacturers generate significant amounts of their company’s profits from commercial managed print services and consumables, the profit model was becoming less effective even in a pre-COVID world. Add to that a global pandemic that drove business to migrate employees to work remotely and you can imagine the challenges this segment is seeing.

The swift shift from office buildings to the work from home setting not only significantly reduced commercial print demand, but also fast-tracked the migration from physical print workflows to digital.  With productivity and business continuity reflecting a strong performance from the work from home migration, even with a reasonable percentage of employees returning to the office post-COVID, the likelihood that print and consumable demand will return to pre-COVID volumes is low. According to NPD’s B2B Distributor and Reseller Tracking service, aggregate unit printer volumes (including Laser, Inkjet single and Laser, Inkjet multi-function models) declined by -12% in Q1 2020, and at an even faster rate -21% in Q2 year over year. Consumables didn’t fare much better with Laser Toner for the first half of 2020 declining -24%, while Inkjet Cartridges improved only slightly, growing 2%. In contrast, these categories have seen strong growth on the retail side with consumer needs for print and associated consumables increasing.

While the work from home migration completely changed commercial print usage, there were some small, positive impacts. Home installed legacy printers were typically older and slower, but as employees were forced to work from home printer performance and capability needed to be improved. As a result, printer sales declines in the channel slowed and multi-function Laser printers fared best, decreasing only -4% for the first half. 

Commercial Print Industry: What’s Next 

The damage inflicted on the commercial print industry by COVID-19 has been significant, but there are opportunities to consider. For printer manufacturers pivoting to a new model incorporating a broader service offering could help to reinvent the industry along with providing a more sustainable and lasting financial model for the long term. 

Based on a recent MIT study, up to 30% of people will work from home multiple days per week versus 4% pre-pandemic. This fundamental shift will help to frame future strategies, products and services for print manufacturers looking to address a more decentralized remote employee base of their major corporate customers. 

Post-COVID, decentralized, on-demand printing options may be one of the areas manufacturers look to leverage, as they are not physically restricted by home or office. Kiosk based resources can be deployed at high activity locations including schools, airports or high traffic retail locations able to transact, print and go in short order. 

Another interesting concept is Device as a Service (Daas) option for Printers. Utilizing an existing model in place for servers and other technologies, DaaS provides significant flexibility for companies with remote workforces able to install, manage, service and recover deployed devices without negatively impacting productivity and cost. DaaS also provides improved financial flexibility as the associated service costs can be treated as an operating expense and recognized monthly versus a traditional capital expense that would need to be depreciated over a typical 3-year period.

Final Thoughts 

While there will always be a need and value for the printed document, especially within Healthcare and Government sectors, digitalization will continue to accelerate and post-COVID the printed document will likely play a secondary, more supportive role to digital workflows. Bottom line, in the old model digitalization equaled lower printed document volumes along with lower consumption of toner and ink and ultimately a loss in profits. Post-COVID, Print manufacturers are at an economic crossroads and will need to embrace digitalization through the development of an integrated service offering including on demand printing, DaaS, as well as collaboration and cloud based digital workflow solutions.


Stay current in your industry
SUBSCRIBE

Related Content

Tagged: B2B Technology


Distribution's Role in Helping Drive Digital Transformation
Distribution's Role in Helping Drive Digital Transformation

Distribution continues to play a vital role as the engine of the channel and will be an important area of focus as we head into 2021.

U.S. B2B Technology Sales Returned to Growth in September  for the First Time Since the Pandemic Began, Reports NPD
U.S. B2B Technology Sales Returned to Growth in September for the First Time Since the Pandemic Began, Reports NPD

Challenged by ongoing COVID-19 restrictions, U.S. B2B tech channel sales through Q3 declined 4%. But, according to NPD, sales returned to positive growth for the first time since the start of the pandemic in September.

What the Future of Work Means for B2B
What the Future of Work Means for B2B

The commercial office supplies and B2B technology channel saw challenges this spring as schools and office buildings closed amid the pandemic. We’re sharing unique perspectives on what's ahead from Leen Nsouli, NPD’s office supplies analyst, and Mike Crosby, NPD’s B2B technology analyst.

SMB Reemergence Critical to Post-COVID Economy
SMB Reemergence Critical to Post-COVID Economy

NPD's B2B Industry Analyst, Mike Crosby, takes a look at industries and regions hit hardest by the pandemic, as well as what SMB's will need to focus on post-COVID.

Newsletter

Subscribe and get key market trends and insights relevant to your industry each month.

We will not sell your information. View privacy notice. | Cookie Settings

Follow Us

© 2020 The NPD Group, Inc.