Signage is defined as any kind of visual graphic that is created to inform a particular audience about a specific message. There are a couple of things to point out about this definition. First, it is clear that signage is a very broad industry – this definition covers everything from multi-million dollar Las Vegas marquees, to the often misspelled, handwritten Out of Order signs on the vending machine at your local convenience store. Second, as long as there is an audience, there will be signage. In other words, as long as there is mankind, there is an audience.
Both of these points are great news for those of us in the print and graphics industry. In fact, they should be cause for hope because within the signage market, there exists numerous opportunities for print and graphics companies to prevail during the ongoing tough economic challenges that we are all facing. As 2013 kicks off, signage looks to be a viable and consistent option for print and graphics companies looking to improve on or add to their current business offerings.
To take advantage of these opportunities, businesses need to recognize the current and emerging trends in the signage industry. From materials to production to installation, print and graphics companies cannot win by offering signage alone. They need to understand the State of Signage.
What Industry Insiders Say
Each year, the International Sign Association (ISA) surveys their members and attendees during their International Sign Expo to gauge how the industry as a whole is doing. This survey includes in-person interviews with everyone from sign suppliers, producers and distributors to end users. The good news is that their latest results are positive and they point to a positive outlook for 2013.
According to the ISA’s 2012 report, “A higher percentage of businesses reported growth in the previous six months compared to our 2011 survey.” Better still, two-thirds of respondents said they anticipated double-digit growth in 2013. Let’s break it down even further, to the individual sign shops.
Sign shops made up the largest group of those surveyed, 40%. Of those sign shops, 83% reported “positive growth in the previous six months, though the growth rates were slightly more modest (than some other segments of the sign industry).” The majority stated that their growth was between 1% and 5%. Although growth may not have been as aggressive as distributors or manufacturers last year, sign shops did expect to see higher growth rates this year compared to the other sign industry segments. In fact, almost three-fourths expect double digit growth, while a third expect growth rates of over 20%.
Although growth is anticipated and in general, most companies believe 2013 will be a good year, the unstable economic environment was cited as the single biggest influence that could negatively impact the industry and individual businesses. Yet, since broader economic conditions remained outside the industry’s control, most of the people surveyed chose to remain positive about the new year.
I recently sat down with Kirk Green, CEO of Ferrari Color, one of America’s leading visual communications companies, to discuss what he thought about this past year and where the industry was heading in 2013. I asked him to describe the one thing that stood out in 2012. Kirk said, “There is this trend occurring that has two divergent paths. On one hand you have the larger industry players continuing to consolidate and grow by acquiring other printers, or at the very least, they are partnering to make sure that they can offer a wide range of products for their customers. At the same time we see these micro-players coming into the industry because the barriers to entry are pretty small (which backs up the ISAs report that the highest growth segment of the sign industry will be individual sign shops). Anyone can basically invest in a printer and set up shop.”
When asked what he saw driving the industry this year, Kirk said, “There is a general awareness of sustainability. From the materials to the production process, everyone is looking to cut costs and environmental impact. Retail will continue to be a strong driver as companies look for new and innovative ways to attract and keep customers. Also, trade shows and events usually have a positive effect on industry growth.”
Finally, I specifically asked Kirk about signage. He stated, “I expect to see more and more short-term signage. I think that the life cycle of a sign will get shorter as businesses try to gain traction quicker. To do this they will need different signs and messages to differentiate themselves from other local competitors.”
Four Trends for 2013
Although 2013 will surely pose new challenges, this year is poised to be one of the best for print and graphics companies looking to add signage to their suite of products. But in order to take advantage of the opportunities that exist, businesses need to understand a few of the emerging trends for 2013. At Signs.com, we have identified four key areas which we believe will drive sales throughout this next year.
1. Eco-friendly products will be in higher demand
The “green” movement has been in full swing for a couple years now. We have seen more and more eco-friendly materials pop up but only recently are we seeing true dedication to the principles of sustainable development from manufacturers and graphics producers. Companies like 3M, ARLON, and FujiFilm are dedicating massive resources and website real estate to green initiatives. Why? Because they know that their customers want to engage with environmentally friendly companies who are offering environmentally friendly materials and processes.
Like most trends, the green movement will continue a trickle-down effect until small businesses and consumers want sustainable options when choosing their signs and graphics. Many times, these options are more expensive, yet customers are willing to pay the higher price point to maintain their peace of mind. These new materials present a great opportunity for sign printers and manufacturers because they can offer more options to potential customers and improve their bottom lines by offering materials that generate higher revenues.
2. Online and offline strategies will merge
The popularity of the internet has obviously had an impact in how local businesses market and grow their company offerings. SEO, paid-search, and now social media have all seen a meteoric rise of adoption at the small business level. The belief that by merely opening your doors customers will come has gone the way of the dinosaurs. On the flip side, companies are now realizing that if you simply build a website or a Facebook account, the customers aren’t guaranteed to come either. I believe that this has caused a significant shift in local businesses beginning to merge their offline and online activities into a cohesive strategy.
Banners, window and vehicle decals and building signage are all beginning to promote a business’ website and social profiles more regularly. I continually see “Like Us on Facebook” or “Visit our website for more offers” on the signage that we produce. Conversely, it is very common to see special offers or deals being implemented specifically for Facebook fans or Twitter followers.
So, what does this mean for printers and sign producers? It means that business owners, if they are smart, will continually be changing and ordering new signs to match what they are doing online. Even if they aren’t so smart, it opens the door to educating your customers on combining their multiple campaigns. The more they understand the importance of cohesive online and offline marketing, the more they will be back in your store ordering new and updated signage.
3. Sign shops will debate traditional vs. dynamic digital signage
Another type of merger taking place is between traditional print signage and dynamic digital signage (DDS). The ISA states “The dynamic digital signage marketplace is expanding at a tremendous rate, with compound annual growth in excess of 20 percent. By 2015, it’s expected that the market will stand in excess of $15 billion. While dynamic digital signage is dwarfed by the overall signage industry ($49 billion), it clearly is growing.”
It would be foolish to not acknowledge the fact that electronic signage is growing in popularity and in some ways to the detriment of traditional print. For those of us in the traditional print industry, we can either view this new technology as a threat or we can learn how to coexist and even take advantage of some of the opportunities where DDS falls short.
First of all, the barriers to entry into the DDS world for most small businesses far outweigh the benefits. DDS is cost prohibitive and until that cost is significantly reduced, most small businesses will stay with traditional print. For those businesses that do dabble in DDS, there is no way that a single display board can replace all the printed marketing and wayfinding that exists inside and outside a local retail business. For example, what if you walked into a huge home improvement store that had a DDS at the entrance announcing a sale on slotted, aluminum, 3/4 inch metal screws? Great, right? Well, what if the store didn’t have any other signage? No aisle markers, no sale signs, and no product labels. Even worse, what if there were no restroom signs? Imagine having to go back to the dynamic digital sign and wait until it cycled through multiple messages until you found one that said where the loo was?
Yes, this is an extreme example, but nonetheless, it does show that traditional print isn’t going away quietly. So what are we supposed to do? According to the ISA, sign companies (and more or less printers in general) can develop, partner or ignore. When looking at the numbers, ignoring DDS isn’t really a viable option and I am sure that there is a learning curve associated with developing the hardware, wiring and programming of a DDS system. So that leaves partnering. Even if it is for a short time, partnering is a great way to maintain focus on core business initiatives, while still generating additional revenue (if you don’t believe me, see the #4 trend below). I would also add another option to the ISA’s list: education. Hey, even the Bible repeatedly says “my people perish due to their lack of knowledge.” Don’t perish! Learn about what DDS has to offer and how your traditional print signage can complement a well thought out strategy.
4. Relationship-based growth
Back in December, I wrote another article for Graphic Arts Magazine entitled “The Value of Signage”. In it, I expressed a couple ways that printers could take advantage of customer needs. One of those ways was by partnering with other companies that offered complementary products or services that can be mutually beneficial. I firmly believe that developing these types of relationships will be a huge trend in 2013.
In that same article, I mentioned that business owners and managers, no matter the industry, have a tendency to get tunnel vision. We see the problems we face in production, organizational structure, and revenue generation as internal problems with internal answers. We schedule more meetings to discuss the problems and at the same time shudder because we believe the answers will cost us money we don’t have.
Developing and cultivating relationships with other businesses which offer similar or complementary products can help alleviate some of the stress. At Signs.com, we don’t believe that this is just good in theory; we implement it all the time. As an example, we have received requests for one-of-a-kind hand painted signs or sometimes we have customers who want a unique neon sign built. In both of these situations, we don’t have the internal resources to create a hand painted sign or a custom neon sign. But you had better believe that we have relationships with other sign producers that specialize in those types of products.
Business 101 says that you never want to turn away a potential customer. The same is true in the sign business. If you go the extra mile to get them exactly what they want, whether you produce it or another company produces it, you will likely have a customer for life!
Don’t just limit your partnerships and relationship to the sign industry. For example, identify your target customer and then seek out other businesses that service this same audience. Develop a relationship with these businesses and you will find that their customers can soon become your customers. Again, here is a real life example. Your shop excels at creating channel letter signs for the front of retail strip malls. Sure you might get a new tenant to walk into your shop and ask you to create a sign for them. On the other hand, you could contact the developer of the building and create a partnership with them. Maybe offer financial incentives if they will refer new tenants to you for their signage. It becomes a win-win for you and the developer and when that developer moves on to a new building, then you already have the relationship in place and you are more likely to get that new business.
That’s a Wrap
So where do we go from here? I want to return to the ISA’s industry report for a moment. Another interesting statistic in the report deals with staffing expectations going into 2013. Of all the categories identified by the ISA, sign shops actually reported the highest percentage of respondents that were planning on new hires in existing and new lines of business. Also, they were the least likely to state that they had no plans to hire this next year.
Hiring practices are a great indicator of where the industry, especially for sign manufacturers, is headed in 2013. If sign shops are willing to add new staff, not just for existing lines of business but for new lines of business, then it is pretty clear that the outlook is bright. Maybe those sign shops see the same trends coming that I do and they are already getting prepared.
Whatever 2013 holds for the print and graphics market, we know that signage is here to stay. It is a powerful tool that, if used correctly, can have a major impact on a local business. As members of the industry, we are tasked with making sure we continue to provide the best solutions for our customers. If we continue to educate ourselves and commit to recognizing the trends before us, I have no doubt that the 2014 State of Signage will be even brighter!
