Digital Labels Hitting the Sweet Spot Today, Transforming Tomorrow

Digital label printing is poised for remarkable growth for at least the next decade as companies open their eyes to the unique value proposition and possibilities this exciting and rapidly evolving technology can deliver for their businesses.

As far as hardware trends go, this is a biggie.

By 2022, analysts predict this market will expand to more than $45.2 billion in annual sales – an average annual growth rate of 4.1 percent over the next four years. That’s the equivalent of roughly 1.43 trillion A4 prints, something that should be music to the ears of everyone in this industry.

There’s also a good chance these spectacular forecasts might actually be understating the opportunity at this point. Thanks to the convergence of cutting-edge digital label printing equipment and workflow software applications, companies from a broad swath of industries are investing even more to differentiate their packaging and brand from competitors.

It’s not just the technology that’s changing. The modern entrepreneurial DNA has been fundamentally altered to prioritize fast, flexible, efficient and addictively interactive ways to introduce new ideas and products to more discerning and demanding end users.

There’s a generational sea change afoot and with so much information and entertainment available on so many convenient and distracting platforms, standing out whether you’re selling beer or bubble gum is as much of a business imperative as flavor, price points and distribution prowess. Often, it’s the only meaningful differentiator.

Even more exciting is the prospect that start-up companies and small- and mid-size companies – the ones that previously eschewed digital label technology for reasons of cost, scale and timeliness – will now become a bigger mix of the customer ecosystem. This newfound demand will come from international and domestic companies that dare to dream big and find new means of leveraging this extraordinary technology in ways that we have yet to conceive.

Will we be up to the task?

The challenge for today’s digital label equipment manufacturers primarily comes down to effectively articulating these staggering possibilities, embracing the newest and most compelling digital enhancements, providing solutions at attractive price points and delivering products and customer service at the highest level in the fashion customers have come to expect from all their disparate business and technology partners.

In the hearts and minds of today’s customers, vendors in this industry are no longer just competing against one another in this fairly insular printing and imaging bubble. We’re competing with Apple, Amazon and Uber in the all-important expectations game. Fortunately, we have a pretty compelling story to tell, too.

Opportunities abound

Stepping back from the fray, it’s telling that the largest quote-unquote technology companies in the world – the whales that comprise the meat and potatoes of the Nasdaq – are in a full-out sprint to become service and product goliaths. Meanwhile, traditional product and service companies, like so many in our industry, are scrambling to become exceptional technology companies.

Apple has hitched its wagon to credit cards, old-media aggregation and original television and film production because it needs recurring revenue to offset pricing pressure and saturation in its hardware business. Amazon is a lot of things, but it’s mostly a ginormous cloud computing service that also happens to be an online retailing monster that recently spent billions to buy fancy brick-and-mortar grocery stores.

Conversely, you have companies like Goldman Sachs (Apple’s credit card partner), Exxon and Walmart – to name but a few of the biggest service and product companies on the planet – spending billions to reimagine and reinvent themselves as technology (first) companies that also happen to sell gas, diapers and ETFs.

Somewhere in the middle of this tectonic transformation resides the digital label printing sweet spot.

No matter what’s being sold, the digital economy demands that companies do everything and anything possible to reduce overhead and cut expenses to maximize profitability. It’s always been so, but the speed and scale of this digital transformation leaves little to no margin for error.

And thanks to pressure-sensitive digital labels utilizing variable data printing (VDP) technology – along with advanced workflow software applications and an inherent and hard-earned understanding of the nuances of commercial printing – our industry can offer a solution that fits the technical requirements, frenetic pace and cost-cutting mandates facing our current and future customers who are slugging it out in this new reality.

Printing plates – while still very much in the mix and viable in their own right – are cumbersome and expensive. Using software on the fly to adjust and update labels for any product is cheaper, more flexible and allows for boutique-sized print runs that make sense for smaller companies or product lines within larger organizations. It eliminates waste in favor of haste.

The entire process of conceiving and rendering a design for a label is sped up. Ready-to-print PDFs can be created in days rather than weeks. And because the proofs are printed on a production press, digital labels can be generated with more consistency, better print quality and a broader range of color options.

It’s a modern solution for modern problems. Customers can customize their specific paper, film and foil preferences with a wider variety of colors and gradients. Production costs can be whittled down with ease by allowing customers to select exactly how many prints they need but only pay for the individual unit price instead of ponying up for each individual set.

Customization and speed are at a premium. It’s beyond critical to consumer goods manufacturers that are incessantly modifying and fine-tuning products in real time to keep up with the fluid, fickle tastes of their own customers. Feedback, good and bad, comes in relentless waves from a multitude of sources. The shelf life for what’s “hot” or “new” is ridiculously fleeting. Just ask the fidget spinner guys.

These shorter product lifecycles combined with the proliferation of SKUs and manufacturers desire to get closer, more local and more personalized with their labels make digital label printing the exact right solution for our times.

Taking labels to the next level

We’ve seen this push for personalization come to life on Coke bottles and Bud Light cans and Snickers bars over the past few years. These high-profile examples of the power of digital labeling not only give us a glimpse of what’s possible technically, but a snapshot into the future of how this technology can be used as the conduit – or perhaps the inspiration for – a company’s entire marketing strategy.

Were these advertising and marketing strategies the impetus for the labeling effort or were the possibilities and opportunities afforded by advanced digital labeling technology the genesis of the campaigns? Does it even matter?

For Coca Cola, it mattered. In the wake of its “Share A Coke” campaign, the company enjoyed its first spike in worldwide sales in more than a decade.

Suffice it to say, this industry is only scratching the surface of what’s possible with digital labels.

A lot of very smart people have made a lot of money by focusing on and perfecting the artistic science of influencing consumer purchasing behavior with packaging and labeling. Research has shown that about one-third of product decision-making is based on packaging alone – and most of us make this unconscious choice within about seven seconds.

Unusual or intriguing symbols, images and text are common in the world of consumer products. They give otherwise mundane, commonly used products some personality – and people notice.

Don Draper’s favorite cigarette, Lucky Strike, had this mysterious “L.S./M.F.T” text on its label. There was much speculation (before Google) by younger smokers about what it meant, but old-timers knew it was an acronym for “Lucky Strike Means Fine Tobacco,” an advertising slogan birthed after World War II.

Hipsters who are into Pabst Blue Ribbon (or is that no longer a thing?) might be interested to know the company used to tie a real, actual blue ribbon around every bottle – buying and tying more than a million feet of silk a year – until the 1950s. Then they just started printing an image of the ribbon on the labels.

The point is, labels matter more than most of us think they do and their purpose and function is constantly evolving.

Augmented reality (AR), perhaps familiar to some from the Pokemon Go craze of a couple of years ago, has found its way into the present and future of digital labeling possibilities.

Incorporating AR with digital labels allows customers to interact with products in entirely new ways. For those concerned about appealing to millennial and Generation Z consumers, this next-level use of labeling technology in conjunction with smartphones and mobile apps takes brand interaction to a whole new level.

These labels are designed with a special cue, microtext or image that when swiped against a phone running a customizable AR app will bring the product’s brand and message to life. For example, an AR label with a waterfall image on the bottle of a craft brew will come to life, cascading water and branded wooden barrels over the edge.

Pringles uses AR-enhanced labels on packages that cue up a virtual soccer game that potato chips fans can play after watching a virtual mouth chomp a few virtual chips. To consumers of a certain age, this might seem a bit too gimmicky to make much of an impact. But to young (future) customers, the ones who really matter, it’s pure gold.

While AR-enabled labels might not be ideal for every product category, their mere presence suggests a virtually unlimited number of new ways these complementary technologies can be used in unison with digital label technology to create new revenue streams and commensurate demand for better technology and bolder ideas.

To capitalize, digital labeling equipment vendors must continue to push the envelope to develop and fine-tune all this extraordinary hardware and software while also monitoring and anticipating the future of marketing and advertising. It’s crucial to invest the time and resources necessary to educate our customers about all that is possible with this revolutionary labeling technology.

Otherwise, we’re destined to be tomorrow’s silk ribbon supplier.

David Clearman is director of marketing and PLS sales at Muratec America, where he gets the chance to bring a unique product to dealers and end users. He has been with Muratec since 1995.