The 4^th COVID-19 Business Impact Survey from Quocirca between 1^st April and 27^th May 2021 stated that market consolidation, ecosystem building and innovation on the horizon as businesses recognise the need for rapid change.

Around 81% print industry organisations now see the COVID-19 pandemic as bringing opportunities to drive innovation within their business, despite the negative impact it had on the sector over the past year.

The study, conducted among 157 respondents from OEMs, channel organisations and ISVs during April and May 2021, found that most of them (71%) expect to see OEM market consolidation in the next 12 months. 62% believe strengthening alliances will be critical to the future for OEMs, while 86% believe that a thriving digital ecosystem is important between now and 2025.

In summary, positive sentiment is improving compared with the previous survey: 68% now report that the pandemic has had a negative impact on their business, a reduction from the 86% who said the same in May 2020.

Other key findings from the study include:

An urgent need for industry transformation: 61% say that the biggest challenge they face is moving from a product-centric to a services-led model, an obstacle that existed prior to the pandemic, but that has been brought into sharper focus.

Revenue recovery is expected: more than 50% expect to see strong or very strong revenue growth in 2021/22, with a further 27% expecting revenue to remain flat. Organisations that view themselves as market Leaders have stronger expectations for revenue growth than Fast Followers and Middle of the Pack businesses.

Print volumes continue to decline, and full recovery is not anticipated: 85% say they have seen a decline in print volumes; 53% have no or not much confidence that print volumes will return to pre-COVID levels.

Cloud-based services are expected to offer opportunities: 91% expect to see greater demand for cloud-based digital workflows; 81% expect to see demand for cloud-based print management.

The threat of Amazon looms for the channel: 45% of channel respondents are worried about the move of customers to online purchasing.

Commenting on the findings, Quocirca Director Louella Fernandes said: “As the effects of COVID-19 begin to recede in many countries, the shape of the hybrid workplace is starting to emerge. There is a strong sense that now is a critical time for the print industry to position itself to recapture its relevance with customers. However, this will not be achieved through the historical model of product sales and print volumes.

“Our survey respondents accept that print volumes are unlikely to return to pre-pandemic levels and that future revenue growth must be linked to diversification and a change in operating model. Digital workflow solutions, cloud-based print management, and security assessment services that address the new challenges of home and hybrid workers are all major areas of opportunity.”

The importance of strategic alliances and the development of a digital ecosystem are also key features of the future market, as Louella continued: “We are already seeing some interesting partnerships and new businesses emerging focused on the needs of the new-style workplace ecosystem. This is a positive sign and will help businesses map their offerings onto the changing needs of customers.”

MPS offerings must be repositioned for higher value solutions

Asked which areas were likely to be of greater interest to customers as a result of changing working patterns, the top three responses – selected by mor than 80% of respondents in each case – were cloud-based digital workflows, collaboration services and digitisation of paper-based processes. Managed Print Services (MPS) were least expected to be of greater interest, selected by only 36% of respondents. Louella Fernandes comments: “This shows that MPS is viewed as a commodity offering, but it can be the bases for the higher value services that are of more interest to decision-makers. MPS providers must urgently reposition their offerings to take advantage of more software-centric solutions.”

The 4^th Edition of Quocirca’s COVID-19 Business Impact Survey contains details analysis and recommendations for print industry organisations on the key areas of focus for future strategy.

Quocirca said that this is the final edition of the COVID-19-specific research, although the impact of the pandemic on the workplace and the print industry will continue to form a key part of Quocirca’s Market Insight Reports in future.