Over the past few years, InfoTrends has been doing a lot of market research with wide-format printing organizations to try to understand the evolution of the markets in terms of production volumes done using the different available technologies, whether screen or digital printing. The economic downturn has had an obvious impact across markets for wide-format printing but one aspect that may be particularly interesting is the impact that it has had on the way wide-format printing is produced.

Over the past few years, InfoTrends has been doing a lot of market research with wide-format printing organizations to try to understand the evolution of the markets in terms of production volumes done using the different available technologies, whether screen or digital printing. The economic downturn has had an obvious impact across markets for wide-format printing but one aspect that may be particularly interesting is the impact that it has had on the way wide-format printing is produced.

In some of our most recent work, we have found that demands for certain job attributes, such as shorter turnaround times, shorter run lengths, and the need for application of variable data have all accelerated in the U.S. InfoTrends believes these customer demands have stressed the need for printing organizations to produce wide-format graphics using digital printing equipment, but also drives changes through the types of equipment that can be used.

Erosion from screen printing
Overall, I wouldn’t say that what we’re seeing is any enormous shift on an annual basis, but more of a slow erosion of screen print volume into digital. After all, 60% of the respondents reported they are seeing no change in their screen print volume while 24% reported a decline and 18% reported that their screen print volume has grown. Of course the aforementioned erosion will happen at different rates depending on the type of products being produced, but as it relates to wide-format graphics, there is no doubt that the demands of print buyers are exacerbating the move into digital.

InfoTrends believes that in some way the economic downturn is actually causing an increase in screen printing production, as print buyers are looking for the best available price for some of their wide format needs, and while digital is certainly making improvements in operational efficiency and running costs through ink technologies, screen printing will cost less on a per-piece basis, and that is always going to be one of the buyer hot buttons. Also, the need for lowest available pricing through this economic downturn is likely reducing the opportunity to up-sell print buyers into applications that take advantage of digital capabilities such as the application of variable data.

Choice in printing-production methods
So, while screen is providing economic advantages, digital printing provides the abilities to meet growing customer demands for shorter turnarounds and shorter runs. Printing companies know this quite well. As the data from one of our recent surveys shows, wide- format printers recognize the need for multiple production capabilities. As Figure 1 shows, just 3% of the respondents reported that they believe pure play screen printing is the best path to success while 50% reported that they think digital printing is the path to success. While digital obviously has a lot of benefits for more cost effective production of short run work, it is not the panacea to meet all of the challenges in today’s market. There is another 24% that reported that they believe that it will be important to have both analog and digital printing processes.

InfoTrends agrees that, from a manufacturing/production standpoint, at least having access to multiple technologies to meet the long-run and short-run needs of customers is best, but that does not necessarily mean investing in all of that equipment yourself. Printing companies routinely partner up to get jobs printed in the most effective way, to satisfy the cost, quality, and service requirements of print buyers. However, there is another set of responses to that question, which is an even more telling example of where the business is headed. At the rate of 22.2%, respondents reported that they think the best path forward is the evolution from printer to marketing service provider. To do that, we have to revisit the whole business model.

When considering the topic, step back and ask: What business are we really in? Are you a printer or are you in the communications business? If you honestly think that you are just a printer, then focusing on operational efficiency and driving costs out of the business is critical, because there will always be improvements in the technologies and processes that assist in streamlining operations and reducing printing costs. On the other hand, if you believe that you are really in the communications business, then there is a need to evolve and grow your portfolio of services and capabilities that enable communications in multiple formats, including wide-format promotional graphics, direct mail, text messaging, and social media.

IT-enabled sales, marketing, and operations
I have written before about how the convergence of the traditional vertical segments within the wide-format digital-printing market (sign shops, screen printers, reprographics shops, quick printers, digital specialists, photo labs, and commercial printers) has been. Convergence will continue to be one of the most important trends in the wide- format market. As segments come together, tools and technologies that have been developed for one set of users are often applied to wide-format digital printing technologies. As much as any of these other segments, I think the addition of commercial printers to the wide-format market will have a very important impact on wide-format because of the high-volume, manufacturing-type mindset that exists in the commercial printing business. Many commercial printers are getting into wide-format printing to offset the declines in other areas of their business, but also because they recognize that their customers are often the same organizations that buy wide-format graphics to support in-store and large commercial campaigns.

Some of the tools that are frequently in use in commercial printing are perhaps much more IT-oriented than we routinely see in the wide-format-graphics market today. This is true not necessarily in terms of the actual printing, where all segments do digital color and production management at various levels of sophistication, but on the sales, marketing, and operations sides through a set of robust IT-enabled tools within wide-format controller software and RIPs for wide-format printers.

As I write this, I am heading to Orlando for the International Sign Association Sign Expo 2010 to see the public demonstration and launch of some of these new tools. Readers of this magazine have likely seen the increasing introduction of variable data tools for wide format RIPs, but this year we’re seeing operational cost calculators that go well beyond ink and media costs, workflow tools that go beyond job queues, and business analytics that will drive top-line revenue. That’s right—top line revenue. How? By adding in new ways to look at wide-format print jobs, by type of customer, by type of job, by time of year, the data collected about your wide format work can be analyzed and applied to your marketing efforts to simply draw repeat business or to help you build out different marketing strategies and promotions. Analysis of what you are presently doing for customers in particular market segments can help you re-engineer your sales and marketing tools to improve your marketing methods. Analysis of the profit margins on a per-job basis can help you re-engineer your sales efforts to try to drive more high-margin business.

During the economic, downturn many-wide format print service providers went through these kinds of efforts. As the data from one of our recent surveys shows (Figure 2), many print-service providers have adopted a number of new tactics and strategies to help cope with the economic downturn. While the number one response has been to seek new markets, the second and third most common strategies that companies have undertaken have been to make changes within current sales strategies or focus on key market segments. These tools can significantly enhance a printer’s ability to make these types of changes.

I recently got to attend an event, the FESPA Global Summit, in Miami, FL, which brought together some of the leading wide-format-printing organizations across Europe and North America. At the summit, there was a lot of insight on the ways companies are now marketing their services. It was a stark contrast with some of our findings on standard practices among these operations currently. In one of the more interesting presentations, social media ninja Simon Burton described the use of social media as a marketing vehicle, identifying some of the more popular, including LinkedIn, Facebook, and Twitter. (Anecdotally, I know that social media is very hot right now because my wife recently enrolled in a continuing education class called Eight Hot Social Media Marketing Tips You Need to Know that had more than 3,600 people sign up for a class with space for only 1,000 attendees.) Twitter reports on its Website that there are now more than 50 million tweets per day. I believe that social media is hot largely because much of it is free, or at least it doesn’t have a direct capital expenditure, but can provide significant marketing appeal.

In another of the studies that InfoTrends is involved in, about one in five wide-format-printing companies are already participating in social media as a marketing tool. Also at that Summit there was a print buyer from a notable global advertising agency who indicated that one of the biggest areas of need for print buyers was awareness of all of the products and services that their existing partners can provide. Social media can provide an opportunity to promote your services at low cost to new and existing customers. The communications companies I follow using these social-media tools promote some of their interesting wide-format-graphics projects and the good results that advertisers got when they invested in the printed communications these companies produce.

Making decisions aided by business analytics
The other aspect of business analytics that we think will benefit wide-format-printing companies is the operational information that can be applied to make the business run more smoothly or to assist in making business decisions. For example, operational data can tell you specific information about the timing of workloads, so you can be sure you are staffed appropriately during those times. This data can also be applied to make more effective equipment investment decisions, such as the prioritization of the configuration or characteristics of the equipment a company may be deciding about. For example analyze data about your own output, such as how much of it gets mounted, can help better justify the investment in a printer with flatbed capabilities.

Another way to expand the range of services that you provide is to consider all of the aspects of the communications you provide. There is a tremendous opportunity for printing companies to offer consultative services to customers that range from design assistance to signage and graphics management. On the design side, there are chances to offer consultation opportunities that could improve the effectiveness of signage that could enhance the sustainable characteristics of the graphics—or that offer ways for the end user to leverage graphics in multiple ways. For example, companies that are producing lenticular prints can use the same software that they use to make those prints to produce animation graphics that advertisers can use on digital signage systems or on Websites.

At the other end of the supply chain, offering signage- and graphics-management systems can help improve the placement of signage and graphics to improve their consistency and effectiveness and can free up store or location management and staff. Expansion into these kinds of service offerings can help transform a printer into a communications-service provider.

Stay ahead in tech and marketing
Nobody wants to be seen as a running a company or offering a service that has become stagnant. Any type of service company needs to continue to create new aspects to its services or risk commoditization. The development of faster and better printing systems is essentially a given, and our data suggest that print buyers really don’t care that much about your investment in a new printer unless it gives them something new or better.

Today’s wide-format printing systems are as good as they have ever been and will be still better as time goes on. While it is important to stay current as far as equipment goes, it is just as important to continually improve and develop other areas of your company that can deliver better results through more effective sales, marketing and operations. We are very excited about some of the new business-analytics tools that we see entering the wide-format digital-printing market and the opportunities these tools have to enable the evolution of printers into communications service providers.

Tim Greene
Tim Greene has been the director of InfoTrends’ Wide Format Printing Consulting Service since 2001. He is responsible for developing worldwide forecasts of the wide-format-printing market and conducting primary and secondary research. Greene holds a bachelor’s degree in management from Northeastern University. He can be reached at tim_greene@infotrends.com.