Springboard

EVERYONE I KNOW IN this industry has been grinding to get past the COVID pandemic. While some shops didn’t make it, the ones that put in the extra effort to either make changes or adopt new business strategies have come out ahead.

To connect the dots a little bit on “what happened” to “where we are going,” here are some thinking points as you contemplate starting 2022 with a positively fresh attitude.

So, take a minute and recall the beginning of the year. Think back to January of 2021 and how the year started until where we are today:

• We were just getting the COVID vaccine rolled out. People were still hesitant to do much of anything.
• The US was a political mess. Who can ever forget the drama at The Capitol on January 6th?
• The first tradeshow of the year for the industry was the Graphics Pro Expo in Irving, Texas, from May 13 to 14. (I was there. Normally, this would have been the third or fourth event.)
• Shops that were on a shaky financial footing failed. Used equipment is everywhere.
• The number of small businesses that started this year doubled in some areas of the country.
• The US government handed out more than $800 billion in PPP money to businesses. I’ve spoken to several shops that didn’t spend it all, and still have that cash in the bank.

Many of the changes that have taken place over this past year are going to springboard into opportunities or maybe even common ways of working for 2022. Let’s take a look:

Better Financial Foundation

In talking with shop owners this past year at tradeshows, conference calls, and events, there’s one thing that kept popping up that I found amazing.

The shops that operated with the combination of 100 percent of the payment for the order up front, magnified with the financial theory of Profit First, were all in a better financial position than other shops. When COVID struck, they had money in the bank. Their accounts’ receivable total wasn’t outrageous. This fact alone helped them survive.

Even better is they knew their financial numbers. While a good number of unprepared shops don’t know their bottom-line profit margin, these shops knew their numbers to the penny. “What gets measured gets improved,” as they say.

We’ve witnessed several price increases. From the cost of labor to materials to shipping, everything is trending upward. Those who have a finger on the pulse of their profit margin are increasing their customer-facing pricing to keep their profit percentages in check. If there ever was a time in the history of business to increase pricing, it’s now. Raise your prices!

Intense Labor Shortage

Shops everywhere are scrambling to find workers as business not only came back but returned with roaring demand. Heading into 2022, this need has not subsided. In some areas of the country, it has gotten worse. A challenge that many face is finding that skilled operator, production manager, or creative designer is that many of the people who were doing those jobs have left the industry.

Better paying jobs, employment that is more in alignment personally, or other factors have deepened the chasm between open jobs and finding your next rockstar employee.
Shops that have rebuilt their staff have had success, not by finding trained and skilled people to apply, but rather by finding those who want to work and then training them in their roles from scratch. This is where the adage, “Hire for attitude, train for skill” comes into play.

Online Sales

Now more than ever you need to be competing digitally. During the COVID lockdown, consumers found they could order just about anything from their phone or tablet. And they did. Fun fact: my wife still orders groceries online from the iPad at night to be picked up in the morning.

That genie isn’t going back into the bottle. The bar is now higher for you to differentiate your business from others, and having a frictionless, well-designed, and functional online store is where the action is going to be in 2022 and beyond.

Not to mention the real power of the online sale isn’t in the immediate transaction, but in the value of the customer information that’s now at your fingertips and marketing list. The power of online sales is in online repeat sales. If you can sell them one thing, you can sell them a dozen things.

Print on Demand

There’s an emergence and explosion of print on demand: decorated inventory that is not pre-produced but instead made only when an order is accepted. While it’s easy to assume this is handled only by DTG printing, a print on demand workflow can also be used with heat-applied transfers and even embroidery.

With giants Shopify, Etsy, and Amazon powering online stores, there has been a tremendous increase in contract print on demand partners that handle the backend production for the stores. Never has it been easier for someone with a creative idea to build an online store, sell, and get their merchandise produced and shipped to the end customer.

with hybrid printing, the machine doesn’t even stop.

Heat Applied Graphics

There’s no question that there’s a shortage of skilled workers. Many shops currently have a tremendous need for more trained screen print press operators and embroiderers. These skills take time to develop and years of experience to master.

One trend that seems to be catching legs is to move the decoration to a heat-applied transfer instead of a digital or screen print. This also includes the gigantic trend for laser-etched leather patches being applied to hats and other garments. A big reason is that training and developing new staff members to run production is easier. This doesn’t work for orders that have huge volumes, but is centered around orders under 48 pieces.

For 2022, a trend that will absolutely continue to rise is the advent of the direct to film (DTF) printer, which allows shops to print their own head-applied transfers in-house. With this decoration technique coupled with an online store platform, many shops are seeing tremendous success and profitable growth without the screen printing workflow.

Screen Print/Digital Hybrid Printing

One interesting piece of technology to keep your eye on is the increase in screen-print/digital print technology. Hybrid printing production uses a series of regular screen printing frames to produce the underbase for the print, and then a specially designed digital printhead produces the color in a few passes. Often, a clear coat is screen printed after the digital print application for wash fastness.

Shops are investing in this technology for a few reasons. One is to save time in production, mainly during setup for high screen count production orders. Another reason is flexibility. With the same underbase, the print can change with the digital application from shirt to shirt. For example, if one print run had a design with a plaid pattern in the graphic, and the next print run was the same layout but used polka-dots. For screen printing, this would mean a change over on screens to produce the next design. With hybrid printing, the machine doesn’t even stop. You can run both orders back to back, as the digital component is what produces the image.

Better Information and Communication

Let’s face it. Doing business this past year has been a struggle. Orders have come back, and businesses are starting to thrive again, but the kink in the armor has been with the shortages in the supply chain. Garments, consumables, and products that shops need to produce orders have been flaky at best.

Supply chain partners that did a better job of communicating product availability and forecasting kept their customers happier. Product alert emails or texts have helped, as savvy suppliers made it easier to let shops know when an out-of-stock item was back in the warehouse.

For decorators, the more astute business owners used that same philosophy to keep their customers informed on what was happening. Early adopters of the “get orders in early” campaigns saw an increase in not only business but appreciation from their customers as they saw they had their best interests at heart. In 2022, this forward-thinking communication should continue.

Better Processes

With the advent of lower employee counts came the need to dial in processes and workflow systems. Many businesses that spent time working through their process mapping or flow chart exercises found that after they resolved some existing friction points, they could actually run their businesses better and more efficiently than when they had more staff. With labor expenditure reduced and more output going out daily, this meant these businesses were more profitable.

In 2022, you will continue to see more and better software systems that will allow you to control data entry, scheduling, production tracking, and visualization. Plus, from an equipment level, more shops will continue to invest in equipment that helps drive down their labor costs. The trend for “How can we do more with less?” will continue. As it should.

Outsourced Tasks

With the ongoing labor shortage and ramp-up with work, now more than ever companies are outsourcing tasks to the gig economy. The use of virtual assistants is on the rise (I have one). Tasks such as social media posting, order entry, accounting, graphic design, video, audio editing, and even sales lead generation… are all being handled by outsourced assistants.
For art, many shops have been outsourcing graphic design, separations, embroidery digitizing, and other creative tasks to third-party firms. Some shops opt to outsource these tasks to free up higher-level creative staff to work on bigger projects. While others have eliminated the art department entirely from their payroll and only use an outsource vendor.
The world is indeed flat, and with modern technology and communication, it is easier now than ever to staff up with people in other countries to help get the work handled.

Marketing

Waiting around for the phone to ring or email to drop in is a thing of the past. Decorators are building their social media chops and creating posts that begin the lead generation process. More businesses seem to be doing online polls, surveys, videos, blogs, even podcasts, than ever before. Creative content is pushing more sales while simultaneously building awareness and trust. Other shops are also using pay per click and other forms of paid advertising to bring in orders. Many companies are outsourcing this task to firms that have the skillset and savvy to create campaigns that work well.

It’s going to be interesting to see what happens with the changes in social media in the next year, with Facebook changing to Meta and Google blocking third-party cookies.

Bring It On, 2022!

I don’t know about you, but I’m excited to see what the new year will bring. For the shops that emerged out of the COVID funk of 2020, the 2021 year has proven to be very successful.
For 2022, will we see the same issues with the supply chain? Will freight and shipping still be unreliable? Will print on demand and the new movement to direct to film continue to explode? I’m thinking that it will, but it sure will be interesting to see how it plays out. What is your best guess?