The digital textile printing revolution has arrived.
Gabi Seligsohn, chief executive officer of Kornit, speaking at the “Express Fashion” event at the Fashion Institute of Technology on Wednesday, said, “The biggest gap we see is the production gap. The consumer clock is moving at an amazing pace, but the industry clock is very slow. What we need to do is to really close this production gap.”
He said, “That’s one of the key missions of Kornit because we know that textiles is an industry that has always suffered from a very lengthy supply chain and very difficult inventory to manage.”
Seligsohn said digital printing helps respond to the shifting consumer dynamic.
“People want to be unique, people want to dress in a different way and receive recognition–instant gratification–if it’s not same day or next day delivery, we’re frustrated,” he said. “There’s zero tolerance for waiting.”
Creating Speed to Market
For that reason, and the rapid rise of e-commerce, the industry is moving to short runs and the ability to offer customization, while creating online enablement, versatility and agility. This requires “a supply chain with the agility to respond the trends.”
“We’re moving from retail to what we call ‘etail.’ The move to online is truly happening,” Seligsohn told the audience at the event hosted by FIT’s Textile/Surface Design and Fabric Styling department. “Made in USA, or what I call proximity decoration, is what’s driving that movement. We’re moving from the old traditional way of ‘you look for demand and sit on your supply,’ to…I will not supply, until there is demand.”
Raphael Peck, president of Fanatics Brands, a top 50 Internet retailer and a major licensee for all five major sports leagues, as well as a vertical manufacturer, said, “There’s no way we could attack what we call micro moments in sports without the digital technology provided by Kornit.”
Peck said the sports license business is difficult because of the breadth of teams, uniforms, colors and promotional events. While Fanatics also sells through third parties, he said, “We are trying to be just one thing–an incredible brand to the fan.” The business will have sales of about $2 billion this year.
“At the heart of the central nervous system of everything we do right now is digital technology,” Peck said. “We’re on the precipice of where everyone is going to need to go, not just in the wholesale space, but also in the e-commerce space. If wholesalers don’t address the supply chain and the speed of change and create agility, they will continue to die.”
He said vertical companies need vertical management of their inventory, and most importantly, “you need to be able to make goods to order.”
“Nearly 50 percent of everything we do, you see it online, you order it, we make it within two days and we send it to you,” he explained. “That reduces risk and creates supply chain agility that’s pretty profound and that we’re very excited about.”
In addition to the major league teams, Fanatics makes goods for some 660 NCAA colleges and universities.
Chasing Into Demand
“Digital printing allows you to go very deep into demand and when you add a lot of small demand together, it becomes a very meaningful business,” Peck said. “For me to be able to offer a product line as wide as being the only one of three licenses for the National Hockey League, I would have to have Kornit technology. At the end of the day, I’m going to have to sell Nashville Predator T-shirts, but I’m going to sell a lot less Nashville Predator product than I will the Chicago Blackhawks, and that’s where digital technology becomes so important.”
He cited the Super Bowl as an extreme example where 50 percent of revenue is derived in the first week after the game, with digital solutions helping to address the small window of a massive product demand.
“The days of futures are going away,” he said of planning goods and inventory months in advance. “It’s all about supply chain agility, right where Kornit sits. It’s all about do you have the agility to chase into demand.”
Seligsohn agreed that there’s no reason for companies to operate that way anymore and the days of 20 to 30 percent of inventory being written off, which has led to problems for brick and mortar stores and the brands that supply them, need to end.
“That’s the revolution,” Seligsohn said. “Inventory goes bad like food. First sell and then print. We believe that the move to digital is the way to go, perhaps the only way, if you really want to be able to ride this wave to success.”
Kornit has become a leader in the digital direct-to-garment printing market with its exclusive eco-friendly NeoPigment printing process. Kornit’s technology enables innovative business models based on web-to-print, on-demand and mass customization concepts. Kornit also offers a revolutionary approach to the roll-to-roll textile printing industry.
Kornit uses the same ink for all applications and fabrics, with the exception of polyester, where demand is growing and a specific set of inks is being developed.
“We believe digital printing is enabling an online revolution and we’ve been able to put together a global decoration network,” the CEO said. “We reference people to Kornit customers around the world based on the quality of printing they need to do.”
Every digital revolution always is about cost reduction, Seligsohn asserted.
“When you come into the digital world, and this happened in the paper industry, the signage industry, the packing industry, the justification in printing digitally always starts in small quantities,” he said. “Therefore, the way that we started was how can we get run sizes that were below 24 units—the traditional market was about 10,000, 50,000, 100,000—because they wanted to amortize the cost over as large a population as possible. Our newest machine, the Vulcan, has the capability to have a 500-piece run, so it starts to satisfy large-batch manufacturing.”
He said he didn’t know the imitations of the scale of digital printing because the technology keeps evolving.
The Sustainability Factor
On top of meeting demand, Seligsohn said the antiquated technologies of analog printing are labor intensive, they create pollution, they require large-batch manufacturing, and they create a disconnect between the supply chain and the end market we’re dealing with. He said the impact of traditional textile printing on the environment has been severe, particularly in Asia in recent times and now as the industry moves into Africa it could threaten the environment there.
“So, going in a direction that doesn’t adversely affect the environment is very important,” he stressed.
[Read more about digital printing: Avanprint USA Premieres Touting Digital’s Accolades]
Looking ahead, Seligsohn said, “The combination of chemistry and a deep understanding of textiles is where we’re headed as a company. We’ve hired textile professionals into the company, we have very high-end chemistry capabilities and what we want to develop constantly is more capabilities and more applications.”
“When you look at this market, we don’t have a glass ceiling above our head,” he continued. “Printed textiles is an endless market. The idea is to constantly find new verticals…To extend our leadership position, we will continue to invest in technology both in-house and through acquisitions, and do very deep collaborations with customers because they really know what they need.”
The company has 1,200 customers, with the U.S. the largest market, followed by Europe and Asia. It has penetrated the T-shirt, accessories, furniture and fashion markets.
“I believe that we have an opportunity to make a difference,” Sedligsohn added. “This is disrupting technology in an industry that needs disruption. I do feel like we’re peeling an onion. I feel like we’re peeling layer by layer and addressing a wider market. The way to do it is through innovation and technology.”