During past weeks printing industry’s heavy weights including Heidelberg, Koenig and Bauer, Fujifilm, Kodak and others announced price hike on their products and equipment. Apparently, the price increase which impacts consumables as well as equipment is mainly due to the rise in raw material such as copper, aluminum, plastics, additives, sheet metal and wood, and higher shipping and logistics costs. Another reason is the global chip shortage. Worldwide, prices for many industrial metals and electronics have risen rapidly. Even wood, which is needed for packaging for transport, is in short supply. On the other hand, many paper manufacturers also have already announced price increase by up to 11%.
Meanwhile, Manufacturers say the increase is moderate. Of course, moderate is a vague word and manufacturers and customers each have their own interpretation of the word. In case of Fujifilm the increase is double fold. What does all this mean for printers who are already facing shrinking orders and customers? There is no doubt with the printing industry already under pressure and many print service providers struggling to maintain profitable margins, these price increases are likely to add additional stress to the financial picture for many printers.
The increase in price in graphic arts industry seems to be cyclical and you cannot blame it entirely on pandemic. In 2005 there was also a price increase on consumables by major manufacturers and it seems that the underlying reasons were the same. On such a back drop a printer also need to find ways to generate more revenues so he or she can absorb the price increase without having to passe it on to their shrinking pool of customers. One solution could be offering more added value printing, eye catching special effects, innovative finishing solutions, packaging, labels and other means of bringing in more revenues. Also increasing automation and managing the waste will lower the overall costs of any print operation. Printers also need to think outside the box and educate themselves. Take AI (Artificial Intelligence) for example. A number of manufacturers such as Xerox, HP, Canon and others are offering printers solutions that has the potential to open up lucrative new revenue streams for print businesses by improving the effectiveness of the end-to-end printing process, from print job creation through to continuous production and machine service optimizations.
Xerox in particular is suggesting a number of automation solutions that can help printers streamline their operations. Using smart algorithms, self-monitoring and data and analytics can help printers bring down the costs and become more efficient in what they do.
According to Xerox printing companies have a very real opportunity to take advantage of existing software and equipment to bring AI to their businesses. Artificial intelligence gives print shops a huge opportunity to employ online data, or create targeted print catalogs or newsletters based on which pages the customer views.
The fact is that printing industry is changing and pandemic accelerated this trend. Printers also should be able to adapt to the this new high-tech, multichannel world where print is part of a wider communication industry.
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