A new report by Smithers Pira, the Future of Production Printing to 2021: Toner vs Inkjet, forecasts the value of the global print production market will rise by 5 per cent by 2018 before falling back its current level in five years time.
It says the colour inkjet will be the only sector to grow with a 4.9 per cent predicted year on year growth for the next five years.
Smithers Pira defines production print as what many would call transacational, transpromo and statement or billing printing.
The print market researcher says printers will be forced to adapt to a new commercial landscape as postal volumes will fall and disruptive print technologies will expand.
Smithers Pira says postal decline is indicative of the struggle production print faces going forward with data showing that global postal volumes have been declining for several years.
"The Universal POstal Union (UPU) latest statistics show that in 2014 total postal traffic totalled 327.4 billion items, a global decline of 2.6 per cent from 2013. The largest sector is advertising mail, with transactional and production print the next largest," the researcher says.
"On a more positive note, the average weight of letters is increasing – a trend led by production printing, which is indicative of the greater detail and personalisation for the recipient that is now possible."
According to the 2015 International Post Corporation report, priority and non-priority letters, which are largely sent by businesses and governments continue to drop faster than total mail volumes, driven by digital substitutes. Annual volume for these sectors declined by 6.5 per cent and 4.6 per cent respectively in 2014.
Smithers Pira adds, "In response the cost of postage is rising in many countries as postal authorities look to recover their costs on a declining volume, which further impacts on the business proposition for conventional production printed media as organisations look to minimise their mailing costs."
The researcher also says environment-conscious corporations perceive online billing and correspondence as a more environmentally-friendly alternative to traditional ink on paper, which has an impact on the market.
For example, Telstra conducted its own peer-reviewed independent lifecycle analysis aimed to identify the environmental impacts of digital billing compared to paper billing. The analysis concluded, 'for every one million online bills received by customers instead of paper bills, 19.9 tonnes of Co2 equivalents is saved, six tonnes of fossil fuels and 32 tonnes of toxic substances.'
Smithers Pira says, "Given that many public and private sector mailers now have tough environment responsibility commitments cutting back on production printed mailing is often seen as an easy option."
This is indicative of the federal government's recently launched probe into the printing standards of documents presented to Parliament and their necessity 'in an increasing online environment.'
However industry groups such as Two Sides Australia are fighting back against this practice they call 'corporate greenwash', which they claim is an effort by corporates to avoid print by erroneously claiming it is bad for the environment.
Executive director of Two Sides, Kellie Northwood explains, “The common ‘go green and save trees’ claims are a form of greenwashing that is misleading consumers and must be corrected.
“The claims do not consider the renewability of paper, or the numerous social, environmental and economic benefits of well-managed Australian forests that have grown by 308,000 hectares over the last five years, which is the second highest gain of any country in the world.”
Smithers Pira says a trend which will continue to dominate the production print market is manufacturers outsourcing non-core activities such as print, known in the print industry as trade printing.
It uses the example of a pan-European express parcel delivery company that outsources production of transactional documents to Ricoh, which prints over one million invoices and statements a year for the company.
"The outsourced service is improving the company's cashflow while saving money, cutting production costs by 20 per cent," it says. "Previously the company used an internal facility to process data, print and dispatch the invoices and statements.
"The operation struggled to provide the speed and flexibility of service required by the business as it grew.
"The rise of hybrid print and mail services allows centralised production of various business correspondence to be handled by third parties. This trend has been growing for several years, with specialists able to offer print and post services, often below the standard postal costs for the customer."
Smithers Pira says these combined market conditions are collaborating to create a more complex market place, with the onus on printers to adopt more flexible business models in order to adapt and survive.
It concludes, "Central to doing this is for print service providers to understand how they can leverage the latest print technology to realise new revenue streams."
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