By DPS Magazine Staff
Transational printing represents a major portion of digitally printed impressions within the industry. These documents are essential in many verticals and in recent years have taken on more of a marketing role as organizations seek to shift statements from pure cost to an opportunity to reach a captive market.
Above: RISO provides an affordable, small footprint inkjet printer to meet even the tightest budgets.
Continued advancements in workflow and cutsheet inkjet push transactional printing beyond the traditional statement to an attention-generating marketing piece at a time where budgets are tight and security is of utmost importance.
Loss of Pages, Improved Opportunity
There is concern that the recent pandemic has greatly impacted the transactional print space. However, it is proving resilient.
“What we are hearing from our clients who process key business to consumer (B2C) transactional applications, such as banking and credit card servicing, is that their print volume has been negatively impacted by COVID-19,” admits Patty Kustom, global product marketing, BlueCrest Inc. She notes that while the number of jobs has remained the same, the page count has decreased due to fewer consumer transactions. However, they are already seeing a return to normal volumes.
Outside of B2C, she sees other segments including insurance, healthcare, government, and utilities less impacted. “Transactional print has been doing a lot better than you might think,” comments Tim Bolton, senior technology portfolio manager, Inkjet, Commercial and Industrial Printing, Ricoh USA, Inc. “When stay-at-home mandates first came through, transactional print took a dip like just about every other business, but the recovery has been truly impressive. Transactional print is seeing 2020 volumes on par with or in some cases exceeding pre-pandemic levels. Broadly, the transactional print business is very solid right now.”
Before the pandemic, transactional pages were set to decline. According to Glenn Toole, VP sales and marketing, MCS, the company projects that the future volumes of transactional print will continue to decline at a three to five percent annual rate. “This last year, 2020, was certainly at the top end of this range.”
However, while the overall numbers show a decline, Toole says several trends provide opportunities to transactional providers that accelerate the need for in-plant printers to outsource their requirements to independent transactional print providers. “The challenge to find skilled labor is a problem across the whole industry and in-plants may have less of an advantage—compared to service bureaus—in finding and training their workforce.
Further, corporations are feeling more financial pressure and are reluctant to invest in technology outside of their core business. “This provides opportunities for service bureau transactional printers to capture that volume. Over the past year, we have seen encouraging activity with some transactional printers who are aggressively bidding on jobs and enhancing capabilities in order to gain new clients,” says Toole.
As a result, print operations are investing in production units. Andre D’Urbano, director of sales and marketing, RISO, Inc., suggests that while COVID-19 has had a modest impact on transactional print, many transactional print shops have seen a growth rate of almost 20 percent during the past year. “Many corporate businesses understand the value of the statement making a monthly physical visit to their customers office. That statement is being used to send multiple messages and help generate sales opportunities as well. Now that sales and marketing have seized upon the value of the monthly statement as a business tool, we continue to see a metamorphosis of this document and that is good news for the transaction print industry,” he adds.
Making up the Difference
Transactional print providers and service bureaus have built a business on handling sensitive, complex statements. While they face declining volumes, it is essential to find ways to make up the difference.
To do this, Toole points out the importance of having a portfolio of print equipment that is optimized to cost-effectively bid on new work, reduce costs, and increase margins. “From a print standpoint, the move to inkjet production color will help reduce costs,” he asserts.
Kustom sees many clients finding ways to take on new types of applications to make up for declining volumes of transactional print. “Today’s high-quality inkjet printers, which feature up to 2,400 nozzles per inch in native resolution and support a wider range of substrates, allow them to insource other types of commercial work to make up the difference,” she shares.
“Printers who produce transactional print typically have access to a lot of customer data and high-volume presses. With the right infrastructure and mechanics on the back office side, a printer can transform data handling capabilities into more lucrative and in-demand offerings, such as direct mail,” agrees Bolton.
Savvy print providers can even take advantage of the data they already have by expanding their relationships with their transactional customers. “That can mean adding direct mail and campaign-related services, tailored to an audience you already know well. Or, take a smaller but still impactful step—finding ways to add value to transactional print with additions like data-driven onserts or marketing messaging in vibrant color,” he adds.
Demand for Color
The price of color continues to decline, making it more accessible and attractive for transactional purposes.
“The first spot color toner device was launched around 1985. Here we are over 35 years after digital color printing was simplified and we are still debating its cost and effectiveness. What went wrong?” asks D’Urbano. “Kids are growing up in a world full of color tablets, monitors, phones, and TVs and yet the majority of their school work is monochrome because ‘budgets don’t allow for color printing.’” Those who managed transactional print operations long ago recognized that color is part of the fabric of world around us.
“It is therefore part of document tapestry that surrounds us as well. The use of color in transactional print applications is increasing so fast that we will soon begin to see monochrome as the anomaly, not color,” he predicts.
Bolton agrees, noting that clients today expect color. There is still demand for monochrome applications, but color demand continues to increase. “To stay competitive, print providers want to deliver on color and print quality, ideally with expanded color gamut.”
Toole also agrees with the importance of color to transactional printers. “While overall volume is declining, the demand for color is increasing. The adoption of color inkjet printers has lowered the cost of color and has brought the cost into the range of B&W print.”
More print buyers use color to highlight relevant information—both in transactional as well as transpromo situations. Additionally, the White Paper Factory is taking hold in the marketplace. “We see more companies eliminate the need to inventory color forms—and envelopes—and opting to print the entire piece with color,” adds Toole.
“We are watching our current clients grow the amount of color coverage on a transactional page by three to five percent a year,” comments Kustom. She says this is due primarily to making customer communications more engaging by adding colorful charts and graphics, personalized messages and offers, and using color to clarify the call to action. “Equally important, we have developed tools within our end-to-end workflow process to ensure print and mail operations can track and charge back for any increase in color coverage resulting in better profitability.”
Keeping costs low always fuels innovation in the transactional print world.
D’Urbano sees a trend towards simplification and affordability. “Many print operations are moving away from roll-fed platforms and transitioning to the simplicity of cutsheet. “Inkjet today is capable of generating the type of high-volume output needed on a daily or weekly basis. Cutsheet output simplifies the process, increases productivity, and makes life easier for everyone involved. For all those who believe color is expensive, inkjet offers the print buyer the type of affordability that will allow an organization to add color to its statements, envelopes, and marketing pieces with minimal impact to the print budget. Inkjet puts to rest the false pretense that color printing is expensive.”
The mix of production jobs is also transitioning. “There is more customization and personalization, greater color coverage, a blend of longer and shorter print runs, and the need to process more jobs per day under tighter SLAs,” shares Kustom.
She adds that print and mail operations want to partner with a supplier who can offer a broader variety of printing system platforms that can help them better manage this new mix of jobs.
Toole sees the high integrity and high security requirements of the transactional print space migrating into the advertising mail market. “Mailings requiring 100 percent verification and logging are more commonplace now as compared to ten years ago. Print providers that have the skills of transactional providers are often well positioned to gain work in many admail segments. The force behind these trends is the ever-increasing need for privacy as well as the print buyer demanding accountability of their data and mailings.”
“There’s a lot of consolidation in transactional print, with some big players continuing to get bigger,” comments Bolton. A result of this consolidation is that bigger players work hard to do more for their end customers, beyond transactional jobs. They’re stepping up to deliver diverse offerings, as well as working to form true, services-led alliances with customers who know they can rely on them.
For smaller print providers, consolidation can be a real threat as they work to prevent larger service bureaus from poaching key customers, “especially now, when organizations are looking to save money and economies of scale are a great way to do it. To compete, smaller and medium-sized printers are stepping up to deliver exceptional customer experiences through efficiency’ expertise; and attentive, hands-on personnel,” says Bolton.
“While not every printer can afford acquisitions, they can adopt an alliance-driven, services-led approach,” he adds.
Transactional printers constantly face evolving cost and security concerns.
“The pandemic has placed a giant magnifying glass on budgets. Everyone is in a holding pattern and watching expenses like never before. Businesses still need to manufacture, they need to keep selling their products and services. It is the role of the transactional printer to sit with a print buyer and help them navigate through this abnormal economy,” notes D’Urbano.
He says traditional approaches are for traditional times and COVID-19 has made this current period anything but. Print buyers are re-examining the cost and effectiveness of high-quality, glossy marketing pieces. “Can the ‘flat’ look of inkjet have the same impact on the target audience once the document or mailer finds its way out of the mailbox and into our homes? In many cases, the answer is an indisputable, yes. We’ve seen many transactional operations open new revenue streams by offering their customers more color for the same cost or less thanks to inkjet.”
Kustom also sees a need for audit-driven compliance and regulatory tracking, compressed SLAs, and pressures controlling costs and maintaining profit margins. “With the current COVID-19 environment, there is a requirement to automate more across the print and mail functions as a means to reduce reliance on manpower and staffing.”
Bolton points out that transactional printers handle a lot of data, some of it sensitive. “Some customers may incorrectly assume print providers have unsecured, legacy systems in place. It’s up to printers to prove them wrong, securing workflows end to end. Getting security certifications can train employees to better protect customer data while also putting clients at ease that their sensitive information is in good hands,” he suggests.
As previously noted, the availability of skilled labor is the top challenge for the industry in the next five years. “While the overall market volume is in a slow decline, the industry does have the capability to act on opportunities if it can manage the scarcity of skilled labor,” comments Toole. The labor shortage stems from factors such as rising minimum wages; difficult-to-attract, high-skill positions such as data preparation; and lack of training opportunities in the industry.
Up to the Task
There is a strong focus on efficient workflows across print and mail.
Kustom says bringing the traditional silos of print and mail workflow together for a true end-to-end capability creates incremental value across the organization. “A few examples of end-to-end workflow include the ability to automate reprints and provide piece-level tracking to support audit and regulatory compliance, job-level ink tracking to ensure cost recovery, taking advantage of system and operational analytics to support continuous improvement initiatives to drive higher levels of productivity, and postal spend optimization through address hygiene solutions upstream.”
Many new technologies offer higher production throughput to manage production with less labor. Toole adds that the latest inkjet printers and inserters allow greater throughput to help transactional providers.
“No matter what size your shop is, workflow automation and process optimization are hugely helpful,” shares Bolton. “An intelligently, efficiently run small shop can still compete with the big service bureaus, and larger operations can compound efficiencies with better workflows.”
Document and statement printing is a cornerstone of the print industry. This market is driven by the need to stay relevant and profitable, adopting the latest technologies that make it happen. Workflow and advancements in cutsheet inkjet are a big part of this. dps
Mar2021, DPS Magazine