It’s been more than two years since the COVID-19 pandemic first began, but it’s still changing how the world conducts business. From disrupting supply chains to facilitating an e-commerce explosion, COVID-19 has worked its way into almost every industry, including industrial printing.
Since 2020, companies such as Videojet and Squid Ink have been affected by COVID in one way or another. Like other industries, the coding and marking field has been greatly impacted by global supply chain shortages, which have led to product shortages and extended lead times. Similarly, the widespread economic instability of the early pandemic era caused many companies to freeze sales and lay off employees.
However, the pandemic has also led to some economic opportunities as well. For instance, the rising demand for personal protective equipment (PPE) and medical equipment naturally created a demand for traceability solutions. Many printing industry leaders were able to capitalize on this demand by vending thermal inkjet printers and laser marking devices to medical device manufacturers. This kind of market adaptation enabled the top coding and marking companies to exceed their sales targets in 2020, 2021, and 2022, despite the challenges of the pandemic.
The impact of COVID-19 on the printing industry has created mixed results for different companies. Here, we take a look at three of the most notable developments of the last two years.
The COVID-19 pandemic has caused e-commerce to explode, also increasing the demand for printed labels. However, supply chain delays have plagued almost every industry, including industrial printing. Below, we take a deeper look at some of the impacts of the global pandemic on the printing industry.
It should come as no surprise that the pandemic fueled an explosion in e-commerce sales. As more people started working remotely and avoiding public areas, consumer shopping habits followed suit. At a time when the safety of shopping malls and other retail outlets seemed uncertain, online shopping exploded in popularity.
According to statistics from the United States Census Bureau, e-commerce sales rose by 43% during the first year of the pandemic, increasing from $571.2 billion in 2019 to $815.4 billion in 2020. In 2021, e-commerce sales rose again by another 14.2% for a total of $870.8 billion.
With this rise in e-commerce comes an increased demand for various packaging equipment, such as:
For the marking and coding companies that were already working with retailers like Amazon, Walmart, or Target, this opened up several sales opportunities that helped offset a lack of business in other fields.
At the beginning of 2020, there was a widespread sales freeze across the printing industry. Due to the economic uncertainty and travel restrictions of the time, many companies, such as Videojet and Domino Amjet, furloughed and laid off members of their staff to try to save capital. Other companies, such as Redi-Mark and Anser, discontinued their printer models that were near their end-of-life cycles and focused on selling accessories instead.
As the year progressed, however, the general demand for medical equipment began to skyrocket. With that demand came a need for new marking solutions as well. During a time when sales teams couldn’t travel, the drive to produce vaccines, test kits, and protective equipment provided coding and marking companies with a major business opportunity to sell:
The business provided by medical manufacturers helped the largest printer companies (e.g. Videojet, Hitachi, etc.) maintain their sales numbers throughout the pandemic.
Supply chain disruptions have been a constant issue throughout the pandemic, and like so many other industries, the printing field has been affected by the resulting complications.
Unsurprisingly, coding and marking companies across the board have been rationing their consumables as a result of supply chain issues. Videojet, for example, has been struggling to maintain the production of its popular M512-K oil-based ink, which has forced the company to ration even its biggest customers, including P&G, Unilever, and Kraft. Other companies in similar situations have put customers on allocation models to better keep up with demand but not run out of stock.
Product costs have also been fluctuating due to raw material price instability. Quotations are now being revisited approximately every 15 days in accordance with material costs. According to inside sources, this has caused friction between sales teams and their clients, leading to lower overall customer satisfaction.
Moving into Q3, some experts predict that supply chain issues will slowly improve, so these problems will hopefully find resolutions fairly quickly. However, as we’ve seen over the past two years, nothing is certain during a pandemic.
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