Migrating the AIDC Market from Monochrome to Multi-Color

(VDC Research guest blog post for Loftware)

The supply chain has always relied on monochrome barcode labels for traceability. Intensifying competition and more stringent traceability and identification requirements across industries and application environments have given rise to growing demand for multi-colored labels.

These help with product classification/recognition, color coding, issuing safety warnings, branding, and overall signage enhancement, among other applications. VDC recently conducted a web-based enterprise end user survey to determine technical and commercial requirements of 120 US-based organizations as it relates to their investments in color label printing (both pre-printed and on-demand) within the supply chain, leading applications, and purchasing decision barriers and drivers. On average, survey respondents indicated color label printing volumes ranging from 250 to 1,000 on a daily basis. 60% of the respondent pool indicated using pre-printed color labels to support specific tasks with the remaining 40% citing the use of on-demand color label printers. Interest in adding color to labels used for product packaging, shipping, identification, and branding have largely been addressed through pre-printed color label stock with enterprise investments in on-demand color label printers largely restricted to specialized opportunities. However, compliance requirements that mandates the use of color and large-run multi-color labeling needs generated interest in and increased adoption of on-demand color printer models.

VDC’s research on the color labeling market indicates that enterprises are extremely judicious about their labeling investments, keeping a keen eye on total cost of ownership. From a color labeling standpoint, organizations are wary of on-demand color label printers due to the high costs associated with acquiring these devices along with the cost of media and consumables, which is not as economical as that for monochrome thermal label printers. At the same time, end users surveyed indicate that 5-10% of their pre-printed label stock goes to waste because of inventory management and control issues along with high risks associated with the obsolescence of pre-printed label information and even printing on incorrect stock. While GHS (Globally Harmonized System of Classification and Labeling of Chemicals) labeling compliance mandates brought interest levels in color label printing to a fever pitch, there are other specialized applications like support of marketing initiatives including brand building and creating visual identification, shipping labels generation, product image printing, and color coding of patient wristbands or even medical device labels in the health care market.

As printer hardware vendors and their solution partners are able to establish the value propositions associated with color label printing and investments in on-demand printers to support the same, so will the need for highly networked and connected labeling solutions emerge. This will also potentially help drive down overall costs and make this a more viable investment for a broader user base especially as they incur lesser expenses associated with inventory waste, stock storage requirement, and replacements.

For more information on VDC’s coverage of the color label printing opportunity, please click here. Also, for more information on "Why Demand for Color Labeling is on the Rise" check out Loftware's recent article on that topic.

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Richa Gupta

Posted By Richa Gupta

As Director, AutoID & Data Capture for VDC Research, Richa is responsible for strategic research on the global markets for data capture technologies including barcode scanners and printers, and machine vision solutions among others. Data capture hardware vendors and solution providers leverage her expertise in the AIDC market for key market development initiatives, with the highly actionable data and insights helping formulate their long-term business strategies. She undertakes market opportunity sizing and forecasting, competitive landscape analysis, and strategic marketing assistance while also providing valuable thought leadership for this technology market segment. Richa holds a degree in Computer Engineering and an MBA from India.

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