Interview with Omer Kulka

Omer Kulka
Chief Marketing Officer
Kornit Digital

On-Demand Home Décor Market is a Very Fast-Growing Segment

Founded in 2002, the goal for 2025 is to make the Israel-headquartered Kornit Digital a $500 million company with the vision to emerge as a trusted, comprehensive resource for the print-on-demand industry, and being recognised as an advocate of the industry's revolution to bring more sustainable production in an on-demand world. Omer Kulka, chief marketing officer of Kornit Digital, discusses with Paulami Chatterjee the implications of Covid-19 on the digital printing business, the future trends and growth expected from the digital printing industry.

How has covid-19 impacted your country, specially the business of digital printing?

While the virus emergency has caused considerable pain to our economy, and economies in most regions we serve, it has significantly altered consumers' behaviour, and perhaps the most macro, long-term change has been that it quickened the move to online purchasing. Unlike many other industries, digital printing has seen a real boom in recent months because it allows production on demand. With digital, there's no need to keep inventory; people order what they want online, and printers can fulfill and ship those orders immediately. The crisis really drove home the need for resilient, versatile tools that empower businesses to adapt to sudden disruptions and changes in consumer sentiment.

How were your R&D and manufacturing facilities impacted? What percentage of manufacturing has resumed?

Once we adopted the appropriate safety measures for our personnel, things were humming along as they had been previously. After that brief adjustment period, we soon found demand for our systems the highest it has ever been, and we're working tirelessly to fulfill that demand till this moment. We are 100 per cent today, and for the foreseeable future.

By what percentage has this affected profit and is likely to impact further?

We were down a bit in Q2 relative to last year, but our long-term outlook is very strong, and I believe our stock performance has reflected that optimism of late. I would refer you to our Q2 earnings report for more details.

What are the new developments in terms of your product line?

Well, the big one was our acquisition of Custom Gateway, which adds an end-to-end workflow solution for managing the complete production process, from presenting and selling the product online, to routing the order to the appropriate production sites, to producing it in the most efficient and cost-effective manner possible, to shipping it to the customer at the speeds they expect. Our Softener further refined the quality and handfeel of our direct-to-fabric impressions, elevating the finished product to meet the standards of even the most demanding fashion designers. Our new and enhanced fixation improves quality and consistency of imprinted pieces. The Kornit Vulcan Plus, which we introduced as the year began, is now our highest-capacity DTG system, yet able to handle more than 600,000 impressions per year.

Sustainability across the supply chain is an imperative today. How earth-friendly is your product line?

Very. Our inks and consumables meet the most rigorous industry standards such as Eco-Passport and Oeko-Tex, the systems generate no water waste, and the production-on-demand model our technologies encourage are inherently sustainable, eliminating overstocks as fulfillers produce only what's already been sold.

What is the global size of the digital printing industry?

According to figures I've seen, the global digital textile printing market was recently valued a bit over $2 billion and could be four times that size by 2027.

What is the growth story of Kornit Digital?

The world demands more self-expression, more customisation, and more sustainable and responsible production methods, while brands and fulfillers seek to answer that demand in a manner that is reliably profitable. Kornit gives them the capability to do so, and as we prove this point, our success and growth is the result. We will continue to strive to be the one-stop shop for eliminating waste and realising the potential of expression on demand, and believe those efforts will be rewarded with consistent growth for years to come.

What kind of special requirements do your customers generally come up with?

They simply need a system that can adapt to any number of different garments, accessories, and home goods that reflect their niche, the ambitions of their intended catalogues, and their desire to adapt to evolving demands. Earlier this year, we helped countless Kornit customers adapt their operations to adjust and mobilise their production in service of protective facial masks, resulting from the global covid-19 outbreak. If it's a textile piece, and you want to make it look brilliant and expressive, our systems and talented support team can likely help make it happen.

Can digital printing be achieved uniformly on different textile types?

Yes, our proprietary inks and print process enable our systems to print to a multitude of textiles, using a single system and ink set. In order to maintain matching and uniformity across different substrates, we use software solutions to optimise print setups per required results and substrate type.

Where is the manufacturing/production done? What is your installed capacity? How is the demand and supply worked out?

The manufacturing is done in any location that makes the most business sense for a particular customer, and the relatively compact nature of our systems gives them considerable options for configuring their production spaces. Many of our customers handle production in a single location, and some of them have added warehouse space to accommodate increased capacities (resulting from their success). We have customers producing pieces in locations where space is extremely limited, such as New York City, Boston, and Hong Kong. Some customers have opened multiple production sites to disperse their capabilities in accordance with the proximity production model (ensuring production takes place with optimal proximity to the end consumer). Demand and supply are handled any number of ways, also in accordance with the customer's unique business need; the beauty of Kornit technology is that it gives them options, and perhaps the best option of all is that they need not produce a single piece that will go unsold.

In apparel, which are the top product categories to be digitally printed?

T-shirts are probably most common, but our systems are used for sweaters, hoodies, jackets, pants, denim, tote bags, hats, upholstery, pillows, baby apparel…you name it.

What products do you offer regarding digital printing for homes and interiors? What is the growth potential for such products?

Many of our customers use the Kornit Presto (and its predecessor, the Allegro) for roll-to-roll, direct-to-fabric printing, and home goods are a common use for those imprinted fabrics. We've exhibited upholstered chairs and sofas, curtains, lampshades, barstools, pillows, stuffed animals…one customer notably uses the technology to imprint wallpaper. There are countless items one can produce using these fabrics, and the market for bespoke goods and creative expression shows no signs of abating. In many aspects, the home decor market is closely following the apparel market when it comes to trends and dynamics. The on-demand home décor market is a very fast-growing segment.

How are your machines superior to other suppliers?

Our systems are designed, developed, and manufactured with an industrial point of view in mind, so they provide

the optimal combination of reliability and productivity so they can perform as "mission critical" equipment and provide our customer with the best total cost of ownership. However, the biggest part of our competitive edge and technological superiority comes from our unique proprietary process. Capable of digitally decorating textiles in a single step, there are no separate pre- or post-treatments, so it all happens at the push of a button, for the most efficient possible process. It ensures the shortest, simplest possible process of getting the piece from design to finished product. Furthermore, all Kornit consumables meet the most rigorous industry standards for safety and sustainability for a healthier production environment, a finished piece that is safe and nontoxic for all ages, and adherence to widespread demand for more responsible production practices.

How much is the digital printing industry set to grow in the next 5 years?

As consumers increasingly demand customised, personalised, and on-demand apparel, accessories, and home goods, digital printing is the most perfect fit for meeting that demand, so our outlook is fantastic. Our goal is to make Kornit Digital a $500 million company within that timeframe, and considering market conditions, we believe that goal is absolutely reasonable. While Covid-19 has been a clear accelerator for digital transformation in the apparel and home fashion supply chain, conditions have long favoured our business model, and we see no reason why that would change.

How are factors like mass customisation and shorter lead times affecting the digital printing industry?

Those factors are driving brands and fulfillers directly to our doorstep. Traditional print methods require too much preparation, too much labour, too many logistics for an ever-shrinking profit margin. Digital offers total agility, and the ability to generate profit from a single piece ordered, produced, and shipped. If you want to keep up with the demands of ecommerce, when consumers expect limitless options, in any quantity, shipped within 24-48 hours, you need digital.

What kind of software goes along with your digital printers? Is it proprietary software or a third-party software? What kind of configuration does the printers require?

The software eco-system surrounding our systems consists of a variety of proprietary and specially developed solutions for Kornit by third party players, to ensure a full suite of best-in-class solutions. A reliable, versatile workflow solution adds considerable efficiency and control to the end-to-end production process, which is why we added Custom Gateway to our portfolio. A good RIP product is also critical to delivering precise, high-quality graphic impressions, and we incorporate solutions from ColorGate and QuickP into our print systems. Kornit Konnect is a proprietary platform that enables managers to monitor and control their production operations at all times, from any location. Our trained system engineers tailor each system to the needs of individual customers, so those businesses can hit the ground running and generate profits from day one.

Which are the major markets (geographically) for your printers? Which markets are you planning to tap in future?

We serve customers and market to new opportunities all over the world. Our largest market is North America, but we also have a very strong organisation in Europe, and are expanding our capabilities in Asia, South America, and Africa, as well. The ecommerce age has impacted all corners of the globe, and we intend to enable on-demand production wherever it is needed, enabling the proximity production model that's been a success for our industry and many others. As with those using our systems, the closer you are to your customer, the stronger your advantage is in the marketplace.

Tell us more about your direct-to-fabric (roll-to-roll) decoration industry technology?

Kornit Presto is our system for roll-to-roll, direct-to-fabric printing. It includes single-step, inline pretreatment and drying, and prints at more than twice the speed of our previous system; our high-capacity Presto S is the fastest of the lot. It can print to all types of fabrics, to be cut and sewn for any number of applications-the fastest and most sustainable way to get from a digital design to a printed fabric in just a few minutes, and in less than a 10-metre-long process line. We have worked with a number of workflow and cutting vendors, notably Gerber in America and Zund in Europe, to show how this technology provides the ideal cornerstone for a microfactory production model, with every piece of the process taking place in a single, consolidated location. With the recent release of our Softener solution, barriers between digital print and much of the fashion industry have been overcome, and fashion designers can now reap digital's benefits of versatile, graphically brilliant, on-demand production while minimising their reliance on outdated fashion cycles that are ill-suited to the high-speed and intensely personal nature of consumers in the ecommerce age.

Are all your machines Industry 4.0 compliant?

Absolutely. Technologies like our Kornit Konnect platform for remote monitoring and management of productivity reflect our vision, which includes the workflow eco-system with connectivity and data flow between the different stages of the work process. As we have a huge legacy install base across the globe, compatibility and connectivity will continue to grow.

What are the future trends for the textile printing industry markets?

We expect to see continued focus on production on demand, eliminating inventory waste, and fundamentally changing fashion cycles forever. Textile printers will continue to compete for the title of "most sustainable or socially responsible" technology. Social listening as a driver of trends will persist, and people who design their own pieces via tools like Etsy will need producers who can make their ideas into tangible products, either for themselves or to support their own e-businesses. The microfactory, which eliminates supply chain vulnerabilities by bringing every aspect of the production cycle under one roof, will drive demand for efficient digital print technologies. Conversely, the proximity production model, which disperses means of production to localised "spokes" that serve different regions, will drive demand for digital print technologies that can be monitored and managed remotely, producing consistent quality in all locations.

What are the marketing challenges you face for your printers in different markets?

Early incarnations of digital textile printers were, quite frankly, very rough, producing inconsistent results at a very high cost; this left a lasting negative impression among those accustomed to more traditional print methods, but we believe the results coming off our machines today speak to the considerable gains digital has made to become a legitimate foundation for any on-demand print operation. Many screen printers are hesitant to change what's been comfortable for them for a very long time, so overcoming that fear of the new is a common challenge; quite often, the reality of shrinking lead times, shrinking print runs, and competition among those printing anything at any speed will do most of the convincing that digital is a worthwhile endeavour. There's also, sometimes, the belief that sustainability comes at the expense of profit, but our value proposition will demonstrate fulfillers can give consumers the responsible production practices they demand while becoming more cost-effective at the same time.

What are your expansion plans in the coming years?

We have long been clear about our intention to grow via both organic means and acquisitions, and our recent purchase of Custom Gateway expanded our reach and capabilities significantly. It is our vision to become a trusted, comprehensive resource for the print-on-demand industry, serving the ever-greater needs of our customers, and being recognised as advocates of the industry's revolution to bring more sustainable production in an on-demand world. To that end, any expansion that increases Kornit's ability to serve our customers' planning, production, and infrastructure needs, as well as supporting them on a consistent and localised level, will be in play.

This article was first published in the October 2020 edition of the print magazine.

Published on: 14/10/2020

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.