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Kornit Furthers On-Demand Vision with Custom Gateway Merger

As the demand-led production model picks up steam in the apparel and home goods markets, textile printing company Kornit Digital is widening its made-to-order capabilities through an acquisition.

Kornit has purchased on-demand fulfillment software firm Custom Gateway, building on an existing partnership that has included shared clients such as Printful, DTG2Go and Fanatics. With this addition, Kornit is establishing an end-to-end on-demand process through the combination of its printing technology with Custom Gateway’s expertise in workflow optimization.

This merger is happening against the backdrop of declining brick-and-mortar retail sales and booming e-commerce figures due to COVID-19. At the same time, companies are trying to speed up and streamline their supply chains while also reducing their inventory risk. Kornit sees on-demand as the answer.

“Our industry is [at] an inflection point,” Kornit CEO Ronen Samuel, said during an investor call. “The online channel is booming across B2C and B2B environments, and traditional retail channels are transforming how they operate in order to remain relevant to consumers, while at the same time, solving the massive inventory inefficiencies.

“Disruptive moments like this, driven by changing consumer habits, create the perfect storm for the accelerated adoption of agile, digital and sustainable on-demand textile production,” Samuel added.

While Kornit operates in the B2B space, Custom Gateway enables both B2B and consumer-facing personalization. Its cloud-based software allows companies to handle selling on-demand textile products.

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One of the reasons Kornit chose Custom Gateway was its customizable software structure. Custom Gateway has four modules, from which clients can pick and choose what they need.

A catalog module enables teams to manage virtual product imagery and enables consumers to create their own designs. Moving along the purchase funnel, a sales platform handles the collection and management of online orders.

Another module centers on production, including allocating jobs to printers, viewing inventory of blanks and overseeing printing jobs. The on-demand printing can range from customer photo uploads to personalized text. In addition to printing, Custom Gateway supports customization such as embroidery and engraving.

A floor module allows clients to automate production processes. For instance, by combining software components, a customer can collect an order and automatically send it to the ideal printer, like one that’s located nearby to the end consumer.

“When we look at our vision and we think about executing on our vision, it’s about completely automating and digitizing the production floors, and creating that seamless integration—that back end with the front end,” Kornit chief marketing officer Omer Kulka explained during a webinar about the acquisition. “That’s the only way that we can actually create that momentum that is needed to catch up with the consumer demands.”

Kornit Custom Gateway

All of Custom Gateway’s software is integrated with Kornit Konnect, the cloud-based system launched by the printing company last year. Konnect allows Kornit’s clients to monitor their production data in real-time, from ink consumption to costs for particular colorways or designs.

During the webinar, Kulka described Custom Gateway as the “missing piece” in building the infrastructure to enable its clients to do on-demand production.

“The combination of Custom Gateway’s software workflow portfolio with Kornit’s existing and future technologies will bring to the market a unique end-to-end solution for on-demand production,” Samuel said. “Together, we will revolutionize how global brands and fulfillers transforming the supply chain into sustainable, on-demand production to meet consumer needs.”

A major focus for Custom Gateway is marketplaces such as Etsy and eBay, since these types of platforms represent more than half of the e-commerce market. It has also seen an uptick in Shopify-powered stores using its solution. Among Custom Gateway’s more than 300 clients is U.K.-based fashion retailer Next.

“The merging of these two companies is really the right solution to the demands that we see from our customer base, and for the future customers that we aspire to have as our own,” Kulka said.