Print and the pandemic


Did the shift to digital, catalysed by the lockdown, put the final nail in the printer market’s coffin?

Following the President’s announcement that the country was to implement a nationwide lockdown, a period of panic ensued as IT departments frantically sourced laptops and mobile dongles for staff. But the ability to print at home was one aspect often overlooked.

“Hundreds of thousands of people took their laptops home, but left printers in the office, not realising how much they would need them,” says Werner Engelbrecht, GM, Kyocera Document Solutions South Africa.

Initially, the focus was on communication and collaboration, adds Barry Venter, CEO of Nashua. “There were suddenly all of the office buildings with the shared larger volume printers that weren't being used.”

Those employees who didn’t already have a printer at home, and realised the potential need, were faced with a dilemma: having to buy themselves one without the usual degree of choice as stocks rapidly dwindled, or do without.

When they did decide to buy, they often bought the cheapest printer they could find, says Englebrecht. And in so doing, they weren’t fully considering the cost of replacement ink cartridges.
Work and learn
Printers weren’t just being bought for work, either. School from home has been a reality for students and parents, with many finding themselves having to acquire printers for educational assignments.

“School from home created the requirement for parents to have a printer at home to manage the online, offsite teaching of their children. There was an increase in the selling out of stock, from the resellers selling out of both printers and the consumables that go with them,” says Caron de Fortier, HP Printers and Supplies Business Unit manager, DCC. “And whatever is happening with the schools reopening or closing with infections, there will be parents making the decision to home school for the remainder of the year, at least.”
“I don't think people have looked at the cost of printing yet, but the economic slowdown means CFOs will be talking to facilities managers about size of premises, desks, and printing will form part of that cost re-evaluation?”
Jamie Scott, Datacentrix

Deloitte predicts global sales of all-in-one home printers will surge 15% this year to nearly $29 billion, says Engelbrecht. “That’s double the annual growth rate that had been predicted before the coronavirus outbreak.” According to the International Data Corporation (IDC) South Africa’s research analyst Arnold Ponela, the local figures aren’t so positive. “As more businesses started working from home, they paused their considerations for new printers or upgrading their managed print service system. Both print volumes and printer sales decreased.”

IDC forecasts total page volume globally will fall 13.7% in 2020, from 3.2 trillion pages in 2019 to 2.8 trillion pages in 2020. The local market experienced a 6% decline in Q2, as compared to Q2 in 2019, and a quarter-on-quarter decrease of 12% from Q1 2020.

With the likelihood that a vaccine won’t be available any time soon, Ponela estimates that the ‘new normal’ we find ourselves in will be with us for a while. “I think we will stay with this Covid-19 situation into 2021 and 2022. I see a proper recovery late 2022, going into 2023.”
Regardless of how long the pandemic impacts our lives, the rise of work from home is likely to stick around.
Home office
“A lot of companies we've spoken to,” says Mohammed Vachiat, GM: direct sales, Konica Minolta, “have realised the information worker actually gets more out of working from home. They have a better quality of life, improved diet, time for exercise and are applying 100% commitment to get the job done, whereas in the workplace, it’s more social and less productive. Statistics also show that remote workers are deeply loyal to employers.”

With an elongated period of social distancing ahead, and working from home proving its worth, this creates some opportunity to focus on the small office, home office (SOHO) printer market.

Kyocera, for example, has partnered with Vox to offer home printer rental, says Englebrecht. “Kyocera has predominantly played in the business-to-business space until now, and these developments extend the brand’s offering to the business-to-consumer market.”

Nashua has also recognised that the army of home-based employees offers opportunities. Predominantly known for being a print company, it has long been watching the gradual decline in print and has been undergoing its own diversification, which has enabled it to branch out now.

“We see new opportunities servicing end-users or remote workers in their home offices,” says Venter. “If they have an issue, who supports them? Do they call Dial-a-Nerd or do their companies provide some level of support? What's been good for us is the remote service capabilities we have. We're seeing a lot of activity currently with tools that can assist anyone working remotely.”

He adds that he sees the propensity to sell higher volume machines diminishing. “I don't think there will be a lot of mid volume or higher volume machines going out for the foreseeable future. There will be a shift back to a more consumer-centric focus.

“The biggest challenge is consumption. In managed print services, the real value is in ongoing service and supplies, which is the toners. All the print companies are sitting with warehouses filled with toners, but no one is printing or consuming. The way consumables are sold, that model will have to evolve,” he says.

Cost of copy
Jamie Scott, business development manager, Datacentrix, says that the managed print market opportunity has been under threat for some time, due to advances in ink technologies from the likes of HP and Epson.

“All the copiers and enterprise printers use laser technology, the process isn't eco-friendly, they use a lot of electricity, heat cycles to burn toner on to the pages, and there's a lot of moving parts, and things break. Every six months, a maintenance guy comes out to replace a bunch of heaters and rollers, and other elements. With these ink printers, the only moving parts are the rollers to feed the paper. And the new ink packs let you print 50 000 to 80 000 pages from one pack, so the cost per copy has fallen through the floor.”

Scott sees the opportunity for resellers to attack the established copier and large volume printer business, replacing them with the ‘sub R10k’ ink printers, which can be bought upfront and include management tools and software, but don’t incur monthly maintenance costs.

“We're looking at customers to downscale the fleet that you can buy outright, rather than pay something every month. I believe the SOHO market will grow and it will be managed by the corporate themselves.”

This ties in to the future of the workspace, and the long-term implications of a largely work from home employee base.

“Companies will start looking at costs of office space and asking if they need it and if they can sub-let some of it. I don't think people have looked at the cost of printing yet, but the economic slowdown means CFOs will be talking to facilities managers about size of premises, desks, and printing will form part of that cost re-evaluation.”

Ponela agrees: “We'll start seeing smaller office space or shared office spaces. Printers will have to leverage those scenarios, where company A is in the same space as company B, and there is a print solution they can use, but without infringing on the security of the companies.”
Do you really need to print that?
With some employees having to make do with the printers they already had at home, or have been able to acquire since lockdown (and probably at their own expense), there’s a strong likelihood that those without have largely managed to bypass using printers thus reducing paper from their workflows and reducing ongoing demand.

“What we’re seeing,” says Engelbrecht, “is organisations reviewing paper-based processes and fast-tracking digital transformation to enable the continuation of work from home. We’re seeing a heightened interest in enterprise content management, which allows remote staff to access the information they need, produce the content required, and make it available to others.”

De Fortier believes that print does have a future, but it will be a lot smaller than before. “I think there is a huge opportunity for cloud-based solutions, and more selective printing. Companies will probably enforce that due to the costs involved, and the current focus on cost-cutting.”
Asked whether this situation spells the end of the market for printers, IDC’s Ponela says: “We've long been talking about paperless offices, it’s not ‘paperless’ but rather 'paper less', which is about less and less paper. Undoubtedly, we will see less paper, but this is not the final nail in the coffin. There's a lot that still relies on paper.”

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