Recently, I attended a webinar by HP titled, “Cost vs Value; how to monetize digitally printed packaging”. In this webinar I found HP lays out the reasons for Color Label Solutions to exist: by explaining the benefits and returns for moving to on-demand color labels and packages.
In addition, HP provides a ROI tool to calculate the potential return on investment for moving to on-demand color, or in their terms, “Packaging Decoration”. In this post, I’ll summarize the paper; and provide links to download the whitepaper and get the calculator.
Overall, HP states that on-demand color packaging and labeling has 3 key advantages when compared to preprinted:
- No Plates
- No Press Setup
- Easy configuration
These advantages lead to the benefits:
- More cost-effective printing of small batches
- Increased agility; by reducing the time to market
- Increased variation and personalization of labels and packages, in which every item is “one-off”.
The benefits of on-demand color increase the value to the company, both internal and external to customers. But where does a company find the value to pay for the typical cost per unit increase in using on-demand color labels and packages?
HP offers 4 areas to research inside a company to find returns from moving to on-demand:
- Supply Chain- Adding efficiencies
- Marketing-Extending customer engagement
- Finance-Increasing overall profitability
- Business Development-Developing/Testing new market opportunities
#1: In the Supply Chain, HP states moving to on-demand:
- Reduces warehousing
- Frees up capital trapped in inventory
- Allows for fewer materials to be ordered
- Reduces obsolesces of artwork changes
On-Demand saves money throughout the supply chain.
#2: In Marketing, HP opines that on-demand labels and packages are the final opportunity to convince customers to purchase their products. In addition, on-demand color labels and packages enable companies to strengthen brands making it easy to set up product versions and localized promotions. And finally, on-demand color enables brands to invest in promotions and advertising for less than traditional methods.
#3: In Finance, HP says on-demand color offers ways to increase sales and margins; a means to increase overall profitability. By understanding the ratio of gross dollar margin divided by the current cost of “decorating” (the incremental cost of on-demand) labels and packages, companies can calculate the value or return in the investment. For most companies, HP says the increased sales required to pay for the increased cost of on-demand is less than 1%.
#4: In Business Development, HP states that on-demand makes it easy to develop:
- New consumer categories
- New channels
- New territories
- Test markets, special programs, regional customization and tactical e-commerce activities
On-demand enables companies to customize product packaging and labels which is different than traditional channels; making testing of new offers easy to do with limited impact on existing paths to market.
For further information, download this white paper here: http://www8.hp.com/h20195/v2/GetPDF.aspx/4AA7-2182EEW.pdf
Or watch the webinar here: http://hp.brightcovegallery.com/corporate/detail/videos/corporate/video/5805270421001/cost-vs.-value-%E2%80%93-how-to-monetize-digitally-printed-packaging—webinar?autoStart=true
In the companion RODPI (Return on Packaging Decoration Investments) Excel sheet, HP gives companies the methods to calculate their return on investment in moving to on-demand. Email HP here, ropdi@hp.com, to get this ROI calculator.
After reviewing this white paper and calculator, I believe current customers of on-demand color tools can find ideas on how to increase their return on this investment. Further, this white paper gives non-users ideas on how on-demand color labels and packaging will make money for their companies.
With the changes in technologies, on-demand color labels and packages make financial sense for many if not most every company. Contact us to discuss how on-demand solutions we sell will help your company increase returns and support your areas for growth.
Guy Mikel
855-962-7670