The first day focused specifically on the opportunities in the wide-format and signage space, with several sessions dedicated to helping print service providers (PSPs) navigate this segment — whether they are veterans or brand new to the market.
To set the stage for the day, Lisa Cross, principal analyst for NAPCO Research, gave an overview of the category, and an outlook for what’s to come. “Let’s start by recognizing the value and essential role that sign and display graphics play in enabling marketers and organizations of all types to engage, educate, and even entertain audiences,” Cross said.
She further noted that the applications printed on wide-format devices guide and influence our daily lives in many ways, and can be found nearly everywhere you look: floor graphics, banners, posters, signs — these graphics are everywhere.
There are a few broad trends impacting this space today:
–Every surface has become a canvas for printed messaging.
–Marketers are looking for a mix of media to help convey their messages more effectively.
–Embellishments and enhancements are opening up even more creative ways to use print effectively.
–And “Amazon Effect” is driving consumers to want quick turnarounds, including curbside pickup and delivery, which in turn requires the right signage to direct them through the process.
And there is no denying that COVID-19 has changed the way consumers shop and interact with brands, which in turn means there is a strong need for new graphics for things such as social distancing guidelines, or even sporting event cut-outs.
Cross also had some good news overall for the industry. According to the October 2020 edition of the COVID-19 Print Business Indicators Report, from NAPCO Research and the PRINTING United Alliance Research teams, sales are “moving off bottom.” In March/April of this year, when the first report was issued, sign and graphics companies reported a decline in sales of 52.3%. in the July/August period, that number was just a 4.9% decline — still not a full recovery, but it is a good sign that things are starting to pick back up, and that printers are finding new revenue sources in the meantime.
In fact, more than one-third of print buyers, Cross noted, are reporting that demand is increasing for display and signage products, especially in the education, retail, and manufacturing sectors. Banners, signs, and posters are the top three products they are looking to purchase, followed by photography, POP/POS displays, window graphics, and packaging prototypes. Other strong product categories include textiles, billboards, backlit displays, and floor graphics, just to name a few.
So, what lies ahead for 2021? Cross noted that the panel participants in the ongoing COVID-19 research are overall positive. “Theirs is a message of confidence, they anticipate that business will return, and they believe some of the new COVID-19 products they launched brought in some new customers for them that will lead to longer-term opportunities and relationships. They also believe there is going to be more demand for more safety signage and curbside signage. And overall, they are focused on making sure they continue to be profitable and continue to have the resources to reinvest in their businesses.”
Wide-Format Growth MarketsThe next session for the day followed up on that concept of looking ahead to see where the growth markets will be in 2021 and beyond, with keynote speaker Tim Greene, research director for IDC.
He noted that at the end of 2019, companies producing wide-format graphics had high hopes for the year, predicting strong growth across the board. However, then COVID-19 hit, and that impacted businesses of all types and sizes. While there were immediate impacts felts in many of the categories PSPs service, such as retail, automotive, and gasoline, there were also new applications that came out of nowhere, including:
–Advisory billboards with public service announcements
–Social distancing markers and signage
–Drive-through and curbside pickup banners and signage
–Pop-up shelters and virus testing facilities
–Signage for special operating hours
–Yard signage to celebrate ceremonies such as graduations and weddings, that were cancelled because of the virus
Those are, for the most part, all applications that will likely fade out once the virus is more firmly under control. Longer term, Greene noted, there are still opportunities that will come from this unprecedented year:
–Graphics for delivery vehicles, as online shopping for everything from home goods to groceries continues to remain strong.
–Long-term work-from-home solutions, such as backdrops for video meetings.
–Social distancing signage for workplaces that welcome some staff back.
–Branded hand sanitizer stations.
–Redesigned retail environments geared toward a “touchless” system.
Beyond applications, Greene noted, “it’s not just large-format.” In fact, in Q4 2019, 76% of large-format shops reported they are seeking new opportunities, with the top five being: 57.2% looking into design services; 43.3% looking at installation; 40.2% are considering adding 3D printing; 33.5% are looking at permitting services; and 27.3% offering pre-site consultations — those last two looking to commercialize PSPs’ knowledge of the sign making process, rather than just selling the printed signs themselves. While COVID-19 has changed plans, the reality is that it has accelerated the need to evolve into new services, rather than slow this trend down.
“There are big segments of the large-format market — whether it’s a trade show business, restaurants and hospitality, etc. — are undergoing significant disruption, and there’s no two ways about that,” Greene said. “In many ways, there is a different set of applications expected to fuel that recovery, so companies are thinking about ‘how do we get our message out there, how do we do it smarter, faster, with different kinds of substrates.’ And that leads to companies like the large-format graphics providers investing in production technologies that enable that greater application variety.”
Everything from marketing, to supply chains, to resiliency is changing. “There are many ways to evolve,” Greene said, and there are many ways for companies to come out the other side of this. “Develop a detailed plan about who your customers are, who they’re going to be, what do you want them to be, and who do you want them to be, and then how to reach them going forward.” That is the strategy that will take PSPs into 2021, and well beyond.
Surviving Through Crisis with ConvergenceIn the first panel session of the PRINTING United Digital Experience, Denise M. Gustavson, editorial director — Print and Packaging, NAPCO Media, sat down with four PSPs to talk about how their businesses have changed this year, and what they see coming next. She was joined by Greg Neath, VP business development - In-Store & Direct Marketing, Premedia, Transcontinental; Scott Powers, VP of sales, D'Andrea Visual Communications; Brian Adam, president, Olympus Group; and Rich Thompson, owner, AdGraphics.
Across the board, all of these shops ended 2019 strong, and even started 2020 strong, with new facilities, new machines, and a lot of optimism about what the year had to offer. And then March hit, with COVID-19 shutdowns, and everything changed, and they were forced to look at new ways to do business to survive.
That said, just because the world has changed, doesn’t mean there is any less of a demand for print. “People need graphics. This is certainly going to change the world, it’s going to look different on the back end when we come out of the current situation we’re in, but people are still going to go to events, there’s still going to be retail, sports, POP — a lot of people are buying things online, but retail/POP is not going away — and with those types of markets, there’s still going to be a need for printed product,” said Adam. He noted it’s not a “fun time to be in our segment,” but wide-format, especially, will come back and return to grow, and while the short-term will continue to be hard, the long-term, he noted, is bright.
“It seems like every couple month my outlook changes,” noted Powers. “I think it’s going to come back, I feel little trickles of the industry coming back — more and more quotes, more and more conversation, people that are engaging with us… so we see more and more activity.” He went on to note that he is busier today than a month ago, and he sees that trend continuing. One thing he is doing to make sure his shop is ready for what comes is to focus on efficiencies, which means faster equipment, better processes, better inks — everything that can help get jobs through the shop faster, and with higher margins. “The printing industry is full of a whole bunch of survivors — we are survivors, and we will make it. It will be different, and we’ll have to make some changes, but we will make it,” he continued.
That is easier said than done, said Thompson, who likened the need to “pivot” to a sports analogy — a wide receiver being asked to suddenly become an offensive lineman, or a kicker, and it’s just not something they’ve trained for or know how to do. For wide-format businesses, it is much the same thing, suddenly finding themselves needing to become experts in products and services they never even considered before COVID-19. “The smaller guys are going to have a tougher time,” he noted, while those with “diversified skills are going to be the ones to see the brightest light at the end of the day.”
Another deciding factor for those who survive, those who thrive, and those who fail to come out of COVID-19 still in business, will be those who have learned from crises past. The 2008 recession, for example, was cited as one place where many of these shops learned some hard lessons, including that acting too slow to pivot was in many cases worse than making quick decisions that later needed to re-thought. Not acting is far more damaging long term than acting fast and maybe getting it wrong a few times before finding the best path forward.
“If you want to do something now, with the time that is available, start planning out being more productive, doing more with less. How are you going to be that much better when the recovery comes, because it will come,” said Neath.
Investing in the FutureThe final panel session of the day, also moderated by Gustavson, took a closer look at making capital investments, and balancing the need to conserve cash — especially in the uncertain times we live in — with the need to ensure the shop has the technology and equipment needed to meet the rapidly changing needs of customers — both during the COVID-19 crisis, and beyond. Gustavson was joined by John Dumouchel, president Artcraft; Gene Hamzhie, president, FireSprint; and Blaine MacMillan, president, Cowan Graphics, to talk about why they decided to make capital investments in their businesses during the pandemic, and how those purchases will set them up for future success.
Hamzhie noted that he has “purchased quite a bit” during the pandemic. The shop is currently having a new 10x10’ Zünd flatbed cutter installed, and a Durst P5 350 hybrid wide-format press. On the surface, he noted, it was about expanding capacity, but “it’s a little more complicated than that,” he noted. Interest rates are so low, not only was the shop able to add the new equipment, he also refinanced some of the pieces he already had, which, he noted, has upgraded the entire facility without seriously increasing the monthly costs.
The upgrades had been talked about in 2019, he noted, and the shop did have a few price quotes for new equipment, but the growth and challenges of the pandemic — his shop specializes in yard signs, which was one of the few segments to see sales increase, rather than decrease this year — made it far more urgent to invest now, rather than wait another year. It just “really made a lot of sense for us.”
It’s not just about the equipment, though, Hamzhie said. “We like to talk about equipment because it’s sitting out on the floor. It’s physical, you can walk out and look at it, but in all reality, we very easily could spend more money, time, and make a bigger impact with the software. It’s a neat time to be a printer.” Automation and web-to-print are two categories that, in the last few years, he said, have really changed the print industry and the products it can offer, and that gets him excited about what the future will hold, even if it does mean investing in new systems and new upgrades.
Dumouchel noted that he had been looking into T-shirt equipment before the pandemic hit, and had bought some smaller equipment to test it out. But when the pandemic hit, things changed. He had one client come to him with a big job that required installing four wide-format presses just to keep up. He already had one on the floor, he noted, but to meet demand he needed far more capacity to meet that client’s needs. It means that he is “ready and prepared” for that side of the business to explode, and build on this new business and new services once things start to pick up.
In addition to installing new equipment, Dumouchel noted that the shop is also using this time to change all its systems, such as the OS the shop runs on, the web-to-print systems, etc. “We have some time to do that — there’s less disruption to the customers because there’s not as much volume coming through,” he noted.
“If anything, COVID gave us time to re-evaluate everything and see what we need,” Dumouchel continued. “If we’re going to be the company we want to be in a few years, now is the time to fix it. And I’m very pleased with the new software we’re working with, and the new equipment is great, and new market opportunities are being created. I haven’t worked this hard in 15 years, but the creativeness is fun, and I have lots of optimism for the future. … I’m really happy with what we did and what we can accomplish, and I can see future plans for products we going to offer.”
MacMillan noted that his company had a hard time in 2015/2016, which meant it hadn’t been making any capital investments, creating a pent-up need to invest and upgrade. In 2019, he said, the company invested in the Fujifilm Onset X3 HS, with robotics, which he said was a success. But in addition, partially because of the success with pivoting to face shields that the shop had early in the pandemic, MacMillan also invested in several cutters and a sheeter.
“We’re very happy with where we’re at. We think we need to take a longer view — we’re financially in pretty healthy shape, so we felt that, although we need to be frugal and hold on to some of that gunpowder, if you will…, money is very cheap out there, and so we think we’re positioned very well,” after the investments the company has made this year, he said.
“I think [financial investments are] critically important,” he continued. “If you’re financially strapped, that’s one thing. If you’re struggling with day-to-day operations and staffing, that comes first. …We had stopped in 2017 and 2018, and I felt like we missed out on some key growth opportunities, and I think in reflecting back, had we not continued on, we would have been challenged. I think we need to look further ahead as entrepreneurs, we need to go where those holes are, we need to create our own niche, our brand if you will, so that was a big reason why we stayed the course.”
Across the board, the consensus was that now isn’t the time to “lean back.” Rather, it’s the time to lean in, invest in the busines, and take some risks in order to position the business for the long-term. Short-term survival doesn’t do anyone any good if the business then can’t compete once the pandemic is past the work returns. Strategic investments in people, equipment, and systems, as these three shops demonstrate, is the way to move forward into 2021 and beyond.
To listen to all of these sessions, along with product demonstrations from centers around the world, register at digital.printingunited.com/register. And for more content and information, download the official PRINTING United Digital Experience Guide for Day 1 here.