Anyone who knows a thing or two about printing will be quick to tell you that inkjet-based printers are struggling to sell against their laser counterparts. It’s true. As printing shifts away from the home and more toward the office, businesses of all sizes are looking for faster devices, fewer printer interactions (large paper trays, huge supplies yields), and lower CPPs (cost-per-prints). Speed, capacities, and costs have historically been primary barriers for inkjet printers to enter the office space. Over the past several years, another concept has also gained both credibility and popularity in the office arena: Managed Print Services (MPS). Managed Print Services embrace the long-standing copier business model, where product maintenance is assumed by a service provider that frees up the in-house IT staff to work on other things. In addition to maintaining and replacing older printers, managed print service providers also maintain supplies inventories for their clients, which means that offices no longer have to rush to the local office store to buy ink or laser toner.
So what is a major inkjet manufacturer like HP to do to keep fighting these laser bias barriers? Yes, HP is a powerhouse in the laser business, but the company’s profits are also tied to growing its inkjet business and one of the biggest opportunities for ink is the Small and Medium Size Business (SMB) market.
Let me introduce HP’s Officejet Pro X and the Instant Ink program. These two recent introductions are HP’s largest and most aggressive tools to battle laser in the SMB market. So the big question is, will these two initiatives work?
Let’s start with the Officejet Pro X, which introduces HP’s new pagewide array technology that features a printhead that spans over an entire page. While the initial draw of the technology when it was first introduced by Memjet several years ago was speed, HP has identified that high yields and low CPPs are what may be the ultimate specifications that attract customers.
Looking at the technology from a supplies perspective, HP’s new Officejet Pro X brings to market the highest yield ink supplies currently available and the lowest inkjet CPPs. The hp970 and hp971 ink series is available in both standard and high capacity and offers a best CPP of $0.013 for black and $0.068 for color. HP claims that customers can save upwards of 50% against comparable lasers, a message that has been echoed from HP’s Officejet Pro lineup. What the Officejet Pro X brings aside from a considerably lower CPP than lasers though are high yields, comparably lower acquisition costs, and a lower total cost of ownership (TCO). This combination could finally be what HP’s ink division needs to begin to fight its way into a territory that has been almost exclusively laser – large capacities and low CPPs.
HP also launched its Instant Ink program, which is in its most basic form a subscription service for consumers. HP addressed consumers’ major pain points including high priced ink, environmental concerns, and convenience. HP first launched a beta version of the program last year and just last month officially launched the Instant Ink service starting with Best Buy as its first retail partner. The service offers customers an option that provides them with higher yields, lower prices, and the convenience of home delivery. With three different subscription plans, based on usage, customers can get the most value for their dollar. HP attempted to make the program a seamless transition for people who are willing to explore an alternative way of purchasing supplies.
So why should customers switch over to Instant Ink? As noted, HP identified the three largest pain points felt by consumers when purchasing ink: affordability, convenience, and environmental concerns. The program alleviates all three of these issues. The biggest concern of people when purchasing ink is affordability. There are countless stories about how expensive and unreasonable printer ink pricing is. HP addresses this concern by offering customers savings of up to 50% compared to competitors and to regularly priced cartridges. This alone will drive sales of the Instant Ink program, at least to those customers willing to switch their purchasing habits.
While reduced pricing is a driving force to gain customers, HP also had to address convenience. Going out to purchase ink when your printer unexpectedly runs out is like having to go fill up your gas tank at the worst possible time. With HP’s Instant Ink program, the manufacturer takes care of fulfilling the supply for you. The printer notifies HP when you are low on ink and a new cartridge will be shipped directly to your home. Customers simply have to send back their empties. While HP won’t reveal exact yields, the company does state that Instant Ink cartridges have higher yields compared with typical high capacity cartridges. This helps reduce the number of printer interactions, as well as the costs associated for HP.
The final area that HP looked to address with the Instant Ink program is consumers’ environmental concern. According to HP, the Instant Ink program will reduce a customer’s carbon footprint by up to 65% compared with the standard ink sales model. These savings once again come from the higher yield of the ink cartridges in the program, as well as the reduced impact of transportation typically necessary to move the inks to retail stores.
The program currently includes three of HP’s connected printers, the Envy 4500, the Envy 5300, and the Officejet 4630, but the company has plans to incorporate the program for all connected printers under $399. HP’s primary goal with the Instant Ink program is to introduce an alternative purchasing method for inks that benefits both the company and consumers. With the program including printers under the $399 price tag, HP is targeting home users as well as home office users. While MPS is only available to businesses of a certain size with a particular size printer fleet, HP’s Instant Ink program provides the major benefits of MPS to anyone including an individual or home office.
While the Officejet Pro X has a much larger and more immediate impact on the market, both the new technology and the Instant Ink program demonstrate that HP is looking for ways to make its ink business thrive. With billions of dollars of ink sold every year, the company wants to not only protect that business, but grow it. The key to a changing market is to find new ways to serve customers. If HP can successfully show that ink is a viable product and technology against laser, and provide a seamless and cost effective model for printing, it could grow share from laser will continue to lead the market for years to come.
