In this episode of the 2 Regular Guys Podcast, Aaron and Terry will interview Johnny Shell, a Market Analyst at Keypoint Intelligence with over 35 years of experience in decorated apparel. They discuss the 2021-2026 DTG and Digital Textile Forecasts and explore topics such as projected growth, the future of fashion and apparel, and where we are in the digital transformation. The conversation covers various trends and the value of the DTG and digital textile markets. The #Regulators can expect to hear insights and expert analysis from Johnny and are invited to tune in with their own questions for him. Don’t miss this episode, packed with valuable takeaways on the value of the DTG and digital textile markets.
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Digital Textile Forecast
Aaron: Johnny, tell our listeners a little about your background in the industry and your current position with Keypoint Intelligence.
Johnny: It’s great to be with you guys again, and I appreciate the opportunity to be here. So, I’ve been in the printing industry since 1986 and have worked in decorated apparel, sign & graphic, and industrial printing sectors. I’m currently the Principal Analyst for the Textile & Apparel Printing Service at Keypoint Intelligence which is a market research and intelligence organization that provides consulting in a wide range of areas for businesses, product testing, and market intelligence like the forecasts we’re going to talk about today.
Terry: What is the 2021-2026 DTG and Digital Textile Forecast? How was it compiled?
Johnny: So in simple terms, a forecast takes historical data and attempts to predict the future using various data and information that is collected for a specific market. Forecasts are usually in 5-year increments, which also includes 1 year of actual market data (2021-2026). We publish a DTG forecast that includes placements, machine revenue (hardware avg. price), average installed base, print volume, ink volume, retail value of print, and service revenue. We also break the data into hardware segments (Commercial Entry-Level, Commercial, Industrial Mid-Level, Industrial High-Level), and into global regions (NA, SLA, AP, EMEA). The Digital Textile Forecast is basically the same, except it’s focused on roll-to-roll digital textile machines. The data is segmented by printer speed (4 speed segments), by ink type (acid, reactive, direct disperse, pigment, or sublimation inks), and by application (apparel, decor). A market forecast provides critical data like market size and market value to a company, and helps them determine their strategy and product development, or if it’s a target market they want to enter if they aren’t involved. The forecasts are formed by primary and secondary field research with vendors of equipment, inks, printheads, as well as analysis of machine capabilities, end user interviews and onsite visits to production sites. All of this data and information are then funneled through me to generate the final forecast.
Terry: What is the value of the DTG and digital textile markets?
Johnny: In 2021, DTG print value was just over $10B and we predict that by 2026 DTG print value will be worth over $20B. For digital textile, print value in 2021 was a little over $26B and we predict that by 2026, digital textile print value will be over $48B. So, for both of these markets, the outlook is extremely good. Since 2020, e-Commerce sales have boomed and along with that DTG. In 2022, e-commerce was about 20% of all retail sales and that’s expected to reach 24% by 2026. Apparel is the #1 item purchased online now, having surpassed consumer electronics.
Aaron: What do you think are the major challenges facing the DTG and digital textile markets in the coming years?
Johnny: I think a challenge with labor shortages is still looming and disruptive. The labor market saw disruption and turmoil during the pandemic, and then we experienced a mass return to work when everything started to re-open which caused a labor shortage. I also believe there was a mental adjustment for many who were part of the repercussions of the pandemic (laid off, terminated, salary cuts) and are being smarter now with such low unemployment and are picky when choosing their next role, and I think the labor market will be in a state of adjustment a while longer (23Q4-24Q1).
Another “opportunity” is the shift to e-commerce. I think for some, it’s an unknown facet of today’s business and, while software has come a long way, there still isn’t a cohesive, all encompassing solution that can manage the workflow from front- to back-end including ordering, receiving, and invoicing. The production aspects of on-demand are pretty solid; however, there’s still work to be done for a seamless workflow.
Terry: How do you see the global supply chain affecting the DTG and digital textile industry?
Johnny: Global supply chain challenges continue to impact all market segments including apparel decorators and with the global economy stagnant for the entire pandemic, it’s difficult to predict when a full return to supply chain stability will occur. I don’t expect to see a full return to pre-pandemic supply chain modes until late 2023 or early 2024. I know I’m tired of going to the grocery store and they’re out of tea, one of the most consumed commodities on the planet. There’s also geo-political tension that impacts components necessary for the hardware bought in the apparel industry, namely silicon chips. Delivery times for most types of semiconductors have come down over the past year, but they remain nearly three times higher than before the pandemic-induced shortage.
Aaron: How do you see the role of sustainability in the DTG and digital textile markets evolving in the future?
Johnny: Since 2018, the Chinese government has shut down over 80,000 textile print and dye houses. Water pollution as well as high water and energy consumption are no longer accepted in the world’s biggest textile producing country. That speaks volumes about the seat that sustainability has taken at the textile table. Consumer demand will continue to rise as GenZ, and soon Gen Alpha, will stop at nothing to assure their purchasing decisions, and whom they purchase from, are sustainable.
Consumers are buying more eco-friendly products than they did just five years ago, and they plan to continue buying eco-friendly products over the next five years. They prefer an eco-friendly option when shopping and are willing to pay more for sustainable products. The fashion and apparel markets will invest more in digital printing technology due to low water and energy consumption, reduced CO2 emissions, and less waste as the entire textile industry tries to shed its infamous position as the world’s second largest polluter and become more sustainable.
Interestingly though, in some recent surveys, we’ve run, customer demand for sustainable products isn’t as high as we are led to believe so there’s a bit of a disconnect between trends being reported and actual data we’ve captured in our surveys.
Terry: Where can our listeners learn more about the products and services of Keypoint Intelligence like the 2021-2026 DTG and Digital Textile forecasts?
Johnny: Yes, we do more than forecasts which the listeners can find out more by visiting KeypointIntelligence.com. I’ve recently published research on the North American Apparel Decorator Market that dives into current technology used, future purchase plans, percentage of revenues by technology, monthly volumes, average order sizes, and much more so I invite your listeners to check us out!
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