The ink refill market has experienced some ups and downs over the past several years, but the service remains a key component to the global printer supplies industry. The service provides customers with a low-cost option for reusing their empty ink supplies while adding an eco-friendly attribute. Several years ago, ink refilling was offered by a plethora of US retailers including office supply stores, hardware stores, drug stores, and specialty franchises, but has since consolidated with essentially one major player, Retail Inkjet Solutions (RIS), that is local to San Diego, California. Roderick (Rod) Eslinger is the Technical Marketing Manager at RIS and has been with the company for nearly five years.
With over 20 years in the inkjet industry, Rod is also the lead support representative for end-customer printer/cartridge inquiries via www.Inkjet411.com for the US, Canada, Mexico, UK, and central Europe. As a printer supplies analyst, I wanted to get the scoop on the current state of the ink refill market and how RIS is doing things differently than so many of its predecessors.
In your opinion, how has the ink refill market changed in the US over the past few years?
Eslinger: As printer hardware manufacturers have mostly shifted their ink supply model from 2-cartridge systems to predominantly 4 and 5 cartridge systems, printers now ‘burn’ through more ink cartridges per year. While the volume of inkjet hardware units has slowly declined (less 1% per year), ink supply cartridge usage has actually increased (i.e. from 3.4 avg. cartridges used per year in 2008, to 6 avg. cartridges per year today). The estimated $27B+/year worldwide ink consumables pipeline is huge and ink refilling is currently taking only a small bite out of the other aftermarket players’ pie (aftermarket has roughly a 20% share in the US). Currently the hardware trend is toward smaller units with enhanced functionality; we see this with many of Epson and Canon’s new inkjet printer introductions. HP regularly launches a range of consumer desktop and business inkjet devices, which RIS supports and these represent the lion’s share of our refill business. RIS InkCenters® currently refill over 90% of the most popular inkjet cartridges across all of the major printer OEMs.
Are you seeing similar changes (or different trends) in other global markets? You mentioned that France is a booming region, why do you think that is?
Eslinger: Yes, according to a recent statement from The Recycler: "inkjet printing has been rejuvenated and is now going from strength to strength", indicating that OEMs will continue to push hardware offerings into the market. For the past four years in a row, the consumer inkjet market has gained 5%+ year-on-year growth in France. Since late 2014, RIS has partnered with 4 major French retailers, refilling cartridges in around 30 stores so far and our presence there is growing steadily. Going “green” is proving to be very important to the French marketplace, and our channel partners there are excited to offer the refill service at such competitive prices to their customers. In fact, according to CONTEXT in September, EMEA printer shipments climbed again in Q2, +4% year-on-year; consumer inkjet hardware sales continue to be an area of French retailer focus and will be for many years to come.
How have general consumer perceptions of ink refills changed? Are people more or less accepting of the technology?
Eslinger: From the customer’s perspective, it’s mainly about saving on ink cartridge costs. The convenience of dropping your cartridges off at Costco, Fry’s Electronics or any of our other retailer partners while you shop and saving up to 70% as compared to OEM prices is huge. Our customers use their own empty cartridges as opposed to remanufactured companies who collect used cartridges from various waste channels and remanufacture them, while other companies break patent laws by importing clones from China. Our research has shown that most consumers will consider refilling their cartridges largely due to the significant savings. Obtaining reliable ink quality and printer performance is key with other customers and retailers like Costco provide this added level of reassurance to their members.
Have OEM efforts such as HP Instant Ink, Amazon Dash Replenishment, or CISS-technology had any impact on the refill business?
Eslinger: The average consumer in the US typically refrains from signing up for a subscription service to replenish ink in their printer, let alone detergent for their washing machine. The majority of consumers today primarily reserve subscription services for their phone, media feed(s), and perhaps a car payment. Besides, since the majority of customer printing habits usually vary from month to month, these types of programs don’t offer much flexibility for most people and are perhaps better for niche customers who have very regulated printing workflows (i.e. select micro-businesses or small business). While the macro pie may be shifting slightly, ink refilling is such a small sliver of that pie we don’t see much of an impact. Based on numerous InfoTrends and Photizo consumer printing studies over the past ten years, customer printing habits inevitably vary and are typically seasonal. In our experience, when people print they want to print now and when they run out of ink, they want it just as fast.
What is RIS doing differently now, compared to competitors from several years ago?
Eslinger: RIS’s InkCenter® equipment leverages an adaptive-based design where special cartridge family adapters are developed to support each new major series. Multiple cartridges can be refilled at one time, supporting small business needs. An empty cartridge is loaded into the adapter and the adapter locks into various stages of the InkCenter® equipment (drill, prep and fill chamber) during the refilling process. This way whenever a new ink cartridge design is developed by an OEM (take Epson’s brand new long-body 35 & 802 series cartridges for example), our engineers at RIS develop an adapter, which is then shipped to all retail locations. We just added Brother cartridge refill capability in 2017 and are now supporting all 4 of the major printer manufacturers. In addition, with the surge of pigment-based inks found in many HP and most Epson printers (i.e. Epson Expression, Workforce & HP OfficeJet Pro printers), we now refill a larger percentage of cartridges using our high-quality pigment inks…this has become more important to customers in recent years.
Are there any notable technology changes or shifts in marketing strategies that you can speak to?
Eslinger: At RIS, our engineering team continually makes hardware and software upgrades and enhancements to each iteration of the InkCenter® to keep pace with technology and ensure our product is always state-of-the art; delivering increased functionality and the best possible operator experience. Customers want to save money and do something good for the environment, and refilling ink cartridges is a sustainable and eco-friendly practice. Saving money on high-quality ink is already a given value proposition. However, awareness of an ink refilling service is still a surprising unknown to many folks, so we try our best to get the word out. Since RIS completely dominates the retail in-store ink refill category, we can honestly say we now have the World’s Best Ink Refill machine.
How has the consolidation in the ink refill industry affected RIS’s strategy and/or success?
Eslinger: RIS is the ONLY de-centralized refilling service based on customers reusing their own empty ink cartridges. The rest of the aftermarket primarily remanufactures cartridges that have been recovered from random disposal services. We are different and better than a remanufactured cartridge since an empty ink cartridge can typically be refilled up to 10 times – that’s incredible consumer value! The demise of prior refill competitors like Ink-O-Dem (Walgreen’s previous service) quickly paved the way for RIS to become the industry leader within the retail in-store refill space. Our refill business tends to perform the best when placed into a dedicated photo center/tech center area that has support personnel. Combined with the high customer foot traffic at our retail accounts, we have refilled over 30 million cartridges in the last 7 years. A notable mention, RIS is a true “Made in America” based company.
Are printer OEMs presenting any challenges for the RIS business model?
Eslinger: Yes, attempts at keeping the aftermarket at bay is clearly an ongoing printer manufacturer priority and has frustrated numerous customers. Actionable Intelligence’s recent article also questioned this same topic. HP’s 2016 and 2017 HP OfficeJet Pro printer firmware updates temporarily impacted millions of customers and has consequently garnered the attention of multiple tech reviewers including Gizmodo, “Unfortunately, it seems HP has now returned to its iron-fisted ways, once again locking down the use of third-party ink with a software update.” Despite the challenges of ongoing chip encryption and covert time-delayed updates embedded in firmware by OEMs that disrupt the experience of printer users, RIS is still able to deliver a timely, cost-effective solution for our customers. Additionally, the US Supreme Court ruling on printer cartridges in May 2017 legally validates ink cartridge refill services and helps protect the customer when it comes to aftermarket ink choice, via the New York Times.
Do you have any speculation on how the ink refill industry will play out in the next 5-10 years?
Eslinger: Macrotrends indicate that ink in the SMB (small-medium business) space is growing and consumer usage is slowly declining. As new inkjet technology plants continue to be built, consumer and office inkjet hardware offerings will continue to be sold into the channel and inkjet cartridges are clearly not going away. Currently, the highest growth area for inkjet is within the $500 to $3,000 printer hardware space. While laser printers and multifunction printers will still have their place in the office, inkjet’s unique properties are not only making strides in the office, but unique inkjet applications are positioning it for a solid future beyond the office with graphic-arts printing, package-printing, apparel-printing, vehicle wraps, and more. According to IDC, worldwide hardcopy peripherals shipments continued to show modest growth in Q2 2017. Environmental sustainability and product re-use is also becoming more important to customers today; refilling an empty ink cartridge up to 10 times provides incredible consumer value. As we like to say, an empty inkjet cartridge is not broken, it’s just empty!
Outlook for RIS according to gap intelligence
All in all, it appears that RIS has definitely created a niche for itself amidst a market that was several years ago thought to be in significant decline. With major retail partners in the US and abroad, RIS has innovated its technologies and product offerings in an effort to compete with ink remanufacturers and printer OEMs. With so many retailers and manufacturers strategically focused on shifting customers from transactional purchases to contractual (subscription, etc.), RIS maintains its focus on providing a low-cost way for customers to refill and reuse their empty cartridges for immediate use. This method not only provides customers with a great value, but reduces the environmental impact. As consumer printing continues to decline, RIS believes that inkjet will remain an integral part of printing, likely expanding further in the office and high-end commercial segments. With its dynamic ability to innovate, I expect that RIS will maintain its leading position in the global ink refill market for years to come.