There can be no doubt that the global economy and the large format print industry have been tested over the last few years. The overall business climate of the last 12 to 24 months cannot be sugar coated. Several challenges face print service providers, yet opportunity still exists for those who can change their businesses.
The attraction for commercial printers to move into wide-format printing is great and one of the oft-cited benefits is that it requires relatively low capital expenditure, compared to gigantic-sized litho wide-format presses which come with a big price tag to match. So at a time when banks still do not want to lend money for larger capital investments, it is nice to know that wide-format printing is still affordable to get into and this only heightens the sector’s attraction. So what are the challenges for commercial printers wanting to get into this printing sector?
Positive News: Increased Spending for Printed Goods
Let’s look at the upside first. In June 2011, InfoTrends executed a wide-format print buyer study in North America to look at trends in demand for wide-format signage and graphics. This kind of input helps us understand some of the challenges that face print service providers in the wide-format digital graphics market. As the study goes, almost four times as many wide-format print buyers reported that they expect to spend more over the next 12 months than they did over the last 12 months. This is good news for print providers, yet if you want to get in on that growth you need to be prepared to offer these print services and provide the goods at a price the customer is willing to pay. There are no two ways about it — you need to properly position your company with the right skills and equipment to get the job done efficiently. So what are some of the challenges? Let’s have a look!
Challenges of Price vs. Quality
A positive factor from the InfoTrends survey was that print buyers placed greater priority on quality than on price. I have always said that you do not necessarily have to be the cheapest on the block to have a successful LF printing business. What is needed is top quality service, quality product and a good work ethic. It is a good sign that the buyers are placing a greater priority on quality than on price, even though price remains one of the top considerations.
Challenges of Commodity and Raw Materials
“Fuel, silver, and aluminum, were volatile in terms of cost and this directly affects our product costs. These commodities affect the prices our customers pay for necessities such as paper, fuel, and electricity. Plus, the dollar shifted, which is relevant for international companies such as Agfa Graphics,” explains Peter Wilkens, president, Agfa, North America. So challenges exist in keeping the cost down even while raw prices may be going up. This is where efficiencies in business operation come in.
Challenges in Turnaround Times
The InfoTrends survey result pointed to the fact that customers are requiring a faster turnaround time than ever before. A whopping 70 percent of orders need to be fulfilled within two days of being ordered! Customers take forever to make their purchasing decisions and then expect the print provider to turn these jobs around quickly. Here is another reason why workflow efficiencies must get better: companies such as Canon spend lots of money in research to develop software and equipment to help in areas just like this.
“New technology provides speed and efficiency like never before. We need to view this as an opportunity for workstation consolidation. A new high speed printer can replace two or three old printers. Newer technology takes up less space, needs fewer people to run, uses fewer resources and has lower operating costs, but it takes courage and capital to set all this in motion. If we do not embrace these concepts then we will become less competitive. In this respect, the last 12 years have been relatively easy since most of the growth came from a shift from analogue to digital. Now that the industry has matured, we need to become as efficient as possible. It is not as much fun, but it is what is required for future success,” remarked Peter Spring, VP Sales TI Group & SCL Imaging Group.
“Wide Format printing will parallel what has happened in commercial offset printing. To survive in commercial offset today, a company needs to be highly automated, lean on labour and must keep up with technology changes. Workflow is becoming the ‘elephant in the room’ for wide format companies. WF Prepress processes today are disjointed, redundant and error prone. Workflow automation can improve quality, reduce re-work and labour”, explained Marc Welch, North America VP of Sales at GMG Americas.
Printing Technologies to Consider
InfoTrends is projecting about a 20 percent growth rate in wide-format UV-curable inkjet. The advances we have seen in UV-curable inkjet are delivering a lot of these advantages. So if you are looking at industrial type printing, UV offers a lot of advantages.
Durable aqueous printers will also continue to grow as more vendors offer ink sets that provide high quality prints plus durability while also offering lower prices and enhanced environmental properties.
Conclusion
As seen above, customers are looking for high quality, low prices and a fast turnaround time. The wide-format printing business is becoming more competitive than ever before. This is certainly a time we must gain the maximum efficiencies in our businesses. Larger companies like Canon, OCE, etc. spend millions on developing solution based technologies.
The last piece of good news from the InfoTrend 2011 wide-format print buyer study is that these buyers strongly endorse wide-format graphics as an effective way to communicate their advertising or informational messages. That is, they plan to buy wide-format graphics because it is a cost effective way to communicate advertising or their informational messages. Do not hesitate to contact me if you have any further questions.
