By Olivia Cahoon
The transactional space is one of the earliest and largest adopters of digital print. With continued advancements in production inkjet, envelope printing, and supporting software and finishing equipment, the use of digital technology for transactional documents is expected to increase even as digital delivery and paperless billing options mature.
This growth is partially attributed to new trends in the transactional space, such as colored pages, increased variable data, and the use of interactive print functions like quick response (QR) codes. Digital print technology also allows transactional providers to create a white paper factory to streamline workflow and create custom campaigns.
Above: The Konica Minolta WEBjet 200D provides transactional printers with a continuous-feed solution that prints simplex and duplex and cuts, perforates, slits, merges, and stacks in the same machine.
Transactional printing is a large market encompassing everything from bills, forms, invoices, and statements to transpromo and other informational documents, often with sensitive data. A considerable amount of transactional output is currently digitally printed.
“As reported in the industry, the current size of the transactional print market is $3 billion,” shares Kemal Carr, president, Madison Advisors
According to a 2019 report from Keypoint Intelligence/InfoTrends, transpromo is one of the top ten growing applications in the coming years, reveals Eric Hawkinson, VP of marketing, Canon Solutions America, Production Print Solutions. Impressions are expected to grow from nearly 27 billion in 2018 to nearly 33 billion in 2023.
“Transpromo offers a huge opportunity for digital printers due to the ability to add customized promotional content—cross selling and upselling—to individual statements,” states Hawkinson. Today’s digital technology—especially production inkjet—makes combining transactional data with promotional messaging easier.
Glenn Toole, VP, sales & marketing, MCS, Inc., reports the annual revenues associated with transactional mail are in the tens of billions of dollars. “The USPS alone measures revenues of approximately $25 billion in 2019 related to first class mailings—which is heavily dominated by transactional mail.”
Considering that the adoption of high-speed color digital printers is fastest in the high-volume segments, at least 80 percent of this market is fully digital, estimates Toole. Most transactional documents feature some form of personalization so digital print is typically required.
While transactional print holds value in the print industry, the current market size will likely not grow due to digital delivery. However, digital printing’s impact in this segment is expected to increase.
Currently, the overall transactional mail volume remains relatively flat to low decline, however the volume of transactional pages printed using digital inkjet continues to grow, says Kevin Marks, VP, global product management, production print, BlueCrest. “Clients are continuing to move volume from toner to color inkjet as it becomes increasingly cost effective.”
In fact, early adopters are investing in third and fourth generation inkjet devices that print high-quality output at fast speeds. Marks says transactional print providers also benefit from leveraging transactional statements as an important part of the total customer experience. By using color to make statements easier to read, adding targeted and relevant offers, and incorporating charts and graphics to make information clearer, the customer experience is improved.
In Carr’s opinion, the transactional print market’s size is impacted by print suppression and digital delivery. E-delivery for the overall market remains at about 18 to 22 percent and it only goes up a few percentage points each year. “There hasn’t been the big leap that everyone is always expecting,” he admits. “The USPS shows about a three percent decline in first class transactional mail, which is consistent with what we’re seeing,” headds.
As more transactions shift to some form of electronic delivery, many consumers still prefer printed statements with the option to pay bills online, adds Leonard Christopher, worldwide product manager, NEXFINITY & NexPress Digital Presses, Kodak.
While the print side of this market isn’t expected to increase as a whole, there are important shifts within the market. Large in-plant providers such as banks, healthcare, and financial providers increasingly shift their work to outsourcing partners. “This allows them to save some costs and focus on their core strategic initiatives,” explains Toole.
Transactional print has adapted to the advantages of digital print technology. Currently, the biggest trends in this space include color documents, outsourcing, and smarter print.
Smarter print is developing across all applications, including transactional printing. For example, transactional statements were akin to material safety data sheets, which were required by regulations or pure functionality. According to Hawkinson, what remained mostly unexplored was the fact that over 98 percent of transaction statements are opened by the recipient and would historically often be the interaction that customers had with a provider.
“Today, many of the savvier financial institutions use the transaction statements to reduce call center interaction, drive changes in behavior, or promote ancillary services,” explains Hawkinson. While not quite a direct mail piece, the functionality of transactional statements and direct mail is starting to overlap. Central to this is the use of affordable variable color enabled by production inkjet printing systems.
Variable data and color is a major trend in the transactional print space as today’s consumers expect simplified content with relevant information to their personal habits and history. As inkjet reduces the cost premium, color pages are growing by several percentages each year. “As color critical, brand compliance is grows—the market requires month over month, statement over statement consistency,” comments Marks.
With color pages in place, QR codes and augmented reality (AR) take transactional documents a step further. QR codes guide customers to the exact location they need to be. “You see where they went, what they looked at, what they bought, and in the process you now have more information about your customers,” says Daniel J. Cavallo, Jr., director of business development aqueous inkjet, Konica Minolta Business Solutions, U.S.A., Inc.
AR extends customer satisfaction by allowing the bill to communicate with customers and help them understand charges and payment options in addition to presenting new products and services in person.
Aside from technological trends, outsourcing transactional document printing recently became popular. Early adopters include telecommunications, banking, and financial industries. “Only the largest companies can keep the work in house because they have the volume to justify the capital expense,” explains Carr.
Mid-tier companies typically outsource transactional print for cost effectiveness and efficiency. For most mid-tier or even smaller firms, Carr says maintaining an in-house printing operation simply becomes unsustainable over the long term.
Latest Equipment Advantages
The latest printing equipment in the transactional market offers advancements in inkjet technology, envelope printing, and dryer technology.
A variety of printing are available from light to medium production toner to medium to higher production inkjet presses. Costs, capabilities, and image quality vary and depend on the equipment. However, Cavallo states that in 2017 Keypoint Intelligence reported an even split between toner and inkjet usage, and by 2022 inkjet is expected to reach a 60 percent favor.
“This does not mean toner is going away,” assures Cavallo. Instead, it implies that recent inkjet advancements now make it an ideal transactional printing solution with higher resolutions, faster speeds, and paper flexibility.
Production inkjet specifically is a strong solution for transactional printing. New technology improves the speed and color quality of inkjet presses while also offering workflow options that power secure document communications, says Hawkinson. According to InfoTrends 2018 research study, High-Speed Inkjet Printing in Commercial Print Markets, prevalent applications for today’s production inkjet include bills, statements, and regulated transaction communication for both roll-fed and cut-sheet systems.
“Inkjet is an excellent option for transactional document because it typically requires lower ink coverage, uncoated stocks, and variable data,” explains Hawkinson.
At the same time, inkjet helps transactional printers eliminate preprinted forms and print full runs in one pass—with each statement custom to the recipient. This helps reduce inventory and waste, and increase productivity while saving cost and time. “Inkjet is certainly the wave of the future and transactional printers should consider investing in proven inkjet solutions to set themselves up for the next decade,” adds Hawkinson.
Digital color web inkjet presses and the newest sheet-fed digital color inkjet presses also lower transactional print production costs. New sheet-fed products offer the lowest variable costs as well as low capital costs, which Toole says results in a faster payback and a higher return on investment.
New advancements also affect envelope printing, which goes hand in hand with transactional materials. Variable digital color for inline envelope production allows the entire process to be digital. “The same economics and workflow simplicity that has driven the white paper in trend for inserted letters has provided opportunities for companies to lower postage, reduce the use of pre-printed envelopes, and add transpromo value to envelopes using digital color inkjet envelope printers,” offers Toole.
Transactional printers take advantage of finishing technology that enhances transactional print operations. This includes both vision-based inspection systems and dynamic perforators.
With dynamic perforation capabilities, digitally printed white paper is also perforated during that process. With the use of software, Carr says the perforations can be moved to different areas on the document or eliminated altogether, without a changeover. The printed and perforated paper then moves on to the folding and inserting processes, which are increasingly automated.
“Dynamic perforators, available for both sheet-fed and continuous inkjet presses, reflect a move away from pre-printed color shells or every-page-perforated documents,” says Scott Peterson, product marketing manager, Tecnau. Custom perforation patterns are available for each document page, from single remit perforations to complex coupon pages.
Dryer technology improvements help drive higher image quality and faster turnaround—further propelling inkjet’s growth. According to Mike Herold, director global marketing, production inkjet technologies, Ricoh, better dryers mean greater substrate versatility and higher ink limits—expanding users’ creative toolboxes and delivering higher quality, more effective applications.
White Paper Factory
White paper factories are an influential concept of the transactional printing market. In a white paper factory, plain white paper is used with digital printing for a personalized customer communication that streamlines workflow.
“Our company created the concept of the white paper factory back in 2009 with the launch of the IntelliJet printing system family,” shares Marks. The white paper factory eliminates preprinted forms and envelopes—streamlining print and mail workflow and reducing operational and postage costs while delivering more client value with each mail piece. “It’s not enough to either have efficient print or mail finishing operations—our clients are driving for optimized print and mail operations.”
From a cost perspective, white paper factories reduce inventory management and costs. It also simplifies job setup resulting in labor savings and reduced errors. For example, Marks says one client went from setting up 50 jobs to only one. It allows multiple jobs to be consolidated into single print runs using plain white paper and variable data to streamline workflow.
While cost-savings help justify moving to a white paper factory, the upside of gaining revenue and improving the customer experience can be even more impactful. With a white paper factory, customers start by leveraging inline printing technology at inserting to add colorful texts and graphics onto and of inside the envelope, shares Marks.
“The secret to a successful white paper factory is that it cannot only consider the printed statement—it must consider both the statement and the envelope and the entire print and mail workflow,” he adds.
According to Carr, larger transactional printing operations have already implemented some form of a white paper factory because of the cost and time savings, which is important due to the time-sensitive nature of transactional documents.
Customers using a white paper factory enjoy several other benefits. In addition to lower total costs, customers have greater document integrity as the production of the documents have less process steps and less risk of scrap and duplication in the workflow, says Toole. The use of a digital workflow also allows for more design and marketing testing as well as lower costs associated with document version changes.
Handling Sensitive Data
When it comes to regulatory concerns in transactional printing, print providers new to dealing with sensitive data should become more knowledgeable about regulations and understanding compliancy.
“Today’s transactional printers must manage both physical printing and data streams to comply with market requirements for security, completion, and compliance,” states Carlos Martin, solutions manager, digital saddle stitching, Muller Martini.
This requires significant investments in both hardware and software to provide efficient and reliable solutions. Transactional and direct mail companies have an advantage in this space due to existing software/compliance infrastructures. Martin says this is why many key players in the transactional space position themselves as data and analytics solution providers rather than printers. “Their ability to safeguard, print, and distribute highly sensitive data is an extension of their product and service offerings.”
Compliance is a consideration for print providers particularly in insurance, healthcare, and financial service, which are highly regulated. However, document security is of concern to all industries. To learn about current regulations—which can change each year—Carr suggests print providers consider attending conferences and seminars specific to the industries they work in.
Trade associations and other organizations also offer industry-specific certifications, which usually involve being audited by a third party to confirm print operations meet regulatory requirements. In many cases, Carr says these certifications can also be used as a positive differentiation to market transactional printing services.
It’s important to note that the chain of custody of a mail piece and related data is only as strong as its weakest link. Print and mail operations should automate processes and eliminate any potential for human error. “When one part of the print and mail ecosystem is at risk, it can lead to data breach or non-compliance,” warns Marks.
Therefore, it’s imperative to have the highest level of integrated print and mail as well as data security while ensuring documented, standardized process controls are in place. Transactional mail operations must ensure the right documents reach the right recipients, especially in highly regulated industries. Marks adds, “one misplaced document can lead to major financial fines and impact reputation. Print providers can optimize the end-to-end mail piece lifecycle with compliance and ensure all print, insert, sort, and mailing equipment produces at high quality and integrity.
For guidance on regulatory concerns, Christopher says there are industry consulting resources that ideally help print providers come up to speed, depending on the country. In certain areas, the postal system can also provide expertise.
European customers should work within the General Data Protection Regulations while U.S. customers should understand the Personally Identifiable Information Privacy Act. When working with credit information, Hawkinson says providers must comply with the Payment Card Industry Security Standards. Those in healthcare follow Health Insurance Portability and Accountability Act guidelines.
For persons with disabilities, PDF/UA ensures accessibility for those that use assertive technology such as screen readers, screen magnifiers, joysticks, and other technologies to navigate and read electronic content. “Not providing this format of communication when requested by consumers can have significant legal and financial impact on a company,” advises Hawkinson.
To receive regulatory or statuary guidance, he recommends consulting qualified legal counsel. Print providers can hire an expert or consultant in the transactional space.
New print providers should make necessary investments and plans to achieve compliance. This includes the right technology, sound workflow practices, and continuous improvements.
To ensure compliance is achieved, print and mail providers invest in the right technology and processes to ensure a compliant and visible ecosystem. “These tools or solutions do not need to be brand new,” says Marks. Clients can often augment existing solutions to better meet regulatory needs, such as printing, insertion, and sortation of mail pieces—thereby maintaining an end-to-end audit trail.
Any new investments are highly dependent on existing processes and solutions. According to Marks, there are proven software solutions and new technology that can help simplify compliance, add integrity to print and mail operations, and help provide proof of process.
Continuous improvements in the manufacturing process are a mainstay for profitable growth within transactional print organizations. “The use of highly sensitive data leaves no room for error, and any personalization must be relevant to be effective,” explains Hawkinson. Automation, lean manufacturing, and process improvements help ensure that service level agreements and regulatory requirements are met.
Further, Hawkinson says sound workflow practices in 2020 will help propel firms into the future and prepare them for business growth.
For years the industry has pushed to transform transactional print from a cost to an opportunity. Many providers have replaced the former method of printing offset shells and warehousing in favor of a white paper factory where the entire process is managed through a sophisticated workflow and produced with digital print.
With this technology, providers better manage regulatory concerns surrounding transactional printing while ensuring documented, standardized process controls are in place. For guidance on regulatory concerns, providers can consult industry resources and qualified legal counsel.
Mar2020, DPS Magazine