The digital transformation of paper
With the digital transformation, paper communications will migrate in its production technology, in its function within the digital world and in its diversity of applications. In other words, the term paperless is going to imply less paper but not the elimination of paper. The digital transformation entails the use of a different paper, more personalizing, more relevant and of higher quality.
Talking about digital transformation is already an undisputed fact. One of its implications is omnichannel: coordinated communication through all available channels, email, web, SMS, mobile app, digital signage, and, of course, paper formats.
It is true that seeing the transformation in which we are already immersed, there are those who foresee the apocalyptic disappearance of paper as a support for printed communication, but is there a basis to believe in that disappearance?
The evolution of the print communication industry
According to various studies, around 40 trillion US pages are produced in printers around the world, excluding office printing and packaging. That is the equivalent of more than 4 billion kilometers of paper roll, about 190 million tons of paper, which, placed in line one after another, could go and return to Mars more than 30 times each year. If the paper is going to disappear, we can say that we are still a long way off.
But let’s analyze other technologies, their evolution in the markets and estimate what we would expect. In 1995 the digital camera hit the market. Eight years later, in 2003, approximately 50 million of each type – digital and analog – were sold in the world and just 5 years later, in 2007, sales of analog cameras were an anecdote compared to 120 million units. of digital cameras sold. Then came the smartphone. In 2016 it was estimated that sales of digital cameras, those not installed on smartphones, fell to just 26 million units worldwide. This has meant two real turns of the screw in the photography market in just 20 years.
What happened in the photography market, for some, generates the most pessimistic fears regarding the disappearance of paper. But what is really happening in the print communication industry? In Europe the price of paper pulp, the raw material, does not yet indicate a debacle. Not even the drop in global demand seems to have affected its price yet, which has continued to maintain a growing trend: in 2001 Sweden sold a ton of paper for € 500 and today it does so for more than € 800.
But if we assess this same behavior in the cradle of digital transformation, the US, the price index of paper pulp in the domestic market has not stopped falling since 2011, so far moderately, by 15% . However, credit risk analysts for companies in the sector, such as Standard & Poors, classify it as «high risk» with regard to the loss of profitability in the industry, and as «medium risk» due to the drop in demand. by the effect of digital transformation. The paper industry has a floor in other products – packaging, domestic tissue – and although it is foreseeable that demand will decrease somewhat due to the impact of digitization, the price of paper pulp is not going to plummet.
The great paper migration
The bottom line is that no, paper communications are not going away for the moment. They will migrate in their production technology, in their function within the digital world, generating personalized and individualized paper content based on consumer preferences on the Internet, and in their diversity of applications. In other words, the term paperless is going to imply less paper but not the elimination of paper. The digital transformation entails the use of a different paper, more personalizing, more relevant and of higher quality. The total volume will drop, but it won’t go away, not at all. They will be transformed into, for example, catalogs, promotions, or welcome «packs» on paper with messages and content more segmented at the marketing level, even individually.
Digital transformation and omnichannel are aggregative processes, not substitutes. In the same way that some of the largest traditional sales forces are in digital native companies, such as Google or Salesforce.com, which are ranked 26th and 38th of the largest human sales forces in the world. Organizations are already communicating with their clients through different channels: social networks, the web, e-mail, sms, mobile applications and, yes, also through the paper format.
The change has already started. Currently, it is estimated that approximately 100 million kilometers of paper are produced annually with digital printing technology. A technology that enables the intensive use of color and customization for the final receiver in all communications, as well as the reduction of long traditional runs to something closer to production at the moment when demand is generated, reducing obsolete inventories and giving unprecedented freedom and agility to the editing process, whether in industrialized or self-produced mode.
At Ricoh we are already driving forces behind this migration to the digital world, to the world of omnichannel, personal and relevant communication, which manages to win the battle for the attention of the end consumer. This is the real challenge of the future: to be able to differentiate ourselves in a scenario where we are all going to be increasingly bombarded with communications more adapted to our habits and preferences, with increasingly attractive and relevant content.
It is time to get involved in this digital transformation with new digital printing products, new software solutions and new technologies for augmented reality, additive production and automation of marketing relationships to drive business growth and better knowledge of the customers and end consumers.
