In August, Epson officially launched its new EcoTank range of inkjet AiOs in the US market. The lineup is headlined by the fact that it ships with high-yield inks, which are designed to last up to two years before replacements are needed. The inkjets are equipped with large, externally-housed reservoirs that hold ink volumes of up to 11,000-pages black and 8,500-pages color. In exchange for these high-yield supplies, customers pay significantly higher upfront costs and realize long-term cost savings, effectively allowing Epson to flip the traditional razor-razorblade model on its head.
With its EcoTank SKUs now in the US (and already popping up at retail locations), Epson aims to address customer concerns centered on ink replacement costs, a pain point that Epson believes represents a major barrier to color printing. According to Epson, only 10% of pages printed in the US are in color, and this number could increase to two-thirds of pages printed by simply addressing this color printing concern. With its low-cost and low intervention rates, Epson believes that its EcoTank series has the potential to gain share in the small-business printer market.
Photo Courtesy of: Epson
Haven’t I heard of these before?
While EcoTank’s technology and its related cost savings may seem revolutionary to some, the idea behind Epson’s high-capacity ink tank series has been around for five years as part of the vendor’s L-Series of continuous ink supply system (CISS) inkjets. In 2010, Epson launched similar CISS inkjets in emerging markets in an effort to combat third-party ink manufacturers and provide customers with the same value proposition of paying more upfront in exchange for the benefit of long-term ink savings. While this strategy has worked in developing regions, time will tell if it will see success in the US. Many customers may be wary of paying very high acquisition prices in return for a significantly lower total cost of ownership over time, while many others do not have the financial flexibility to pay more now to save money later.
How much are customers really saving and what’s the catch?
Initially, customers are paying much more for an EcoTank model than they would for a similarly-configured inkjet. For example, Epson’s Expression ET-2550 EcoTank carries a $399 ERP, a price that is $200 higher than the cartridge-based Epson Expression Home XP-420 ($99) on which it is based. On a speeds and feeds basis, the Expression ET-2550 EcoTank is nearly identical to the Expression Home XP-420, but adds the EcoTank’s high-yield supplies. Rather than pay an extra $200 for added features such as a faster print engine or a flashy touchscreen display, customers are paying the initial premium in exchange for savings that will take over a year to realize (assuming that users actually print on a frequent basis).
So how much are customers saving by choosing the EcoTank configuration over the traditional XP-420? According to the gap intelligence gapTCO tool, a user who prints 150-pages each month can save up to $737 over five years (based on 50% color pages with 5% black page coverage and 20% color page coverage). At these rates, EcoTank customers would essentially break even at around 16 months of ownership. Even at 100-pages per month, users would break even at two years of ownership and still have enough ink left over in the EcoTank model to last another few years.
The numbers don’t lie, so why aren’t EcoTanks flying off shelves?
Old habits die hard and Epson will be very challenged to change consumer purchasing habits and convince customers and its channel partners of the EcoTank value proposition and its long-term cost savings. This is the reason that everyone in the US finances their smartphones. Epson has done a good job so far generating buzz for the EcoTank series. However, continued efforts will be required, and communicating the line’s value proposition will be especially hard if Epson doesn’t also secure in-store displays that clearly reinforce the benefits of purchasing an EcoTank. Otherwise, these products will be shelved in-line with competing inkjets, positioning the EcoTanks to appear as a less compelling purchase based on specs outlined on a three line fact tag.
Everyone loves options
Though Epson’s EcoTank configuration will appeal mostly to those who are familiar with the high costs of printing, Epson’s EcoTank launch at the very least highlights a continued shift in the inkjet market away from the traditional cartridge purchase model and its associated pain points (cost/convenience) and toward new emerging purchase models. Similar in messaging but quite different in nature to HP’s Instant Ink program, Epson leads with a message of value and convenience, promising “up to two years” of use before ink replacement is required. In stark contrast to the HP program, Epson distances itself from anything that resembles a contract and instead positions its EcoTank products as a solution that nearly eliminates supplies replenishment.
Will Epson’s new business model work?
Overall, Epson’s EcoTank range truly does address the pain points of high print volume consumers. The catch is that these high-print customers must be willing to sacrifice functionality and buy into the value proposition. For Epson, this means that communication is key and the success of its products will rely on long-form marketing efforts that stick and can convince customers to change their purchasing habits. If successful, Epson stands to improve its share in a key segment and possibly scale this technology to new parts of the market.