The year 2008 has been a challenging one for many companies, yet wide format printing has been very profitable for many of those companies. It’s still an emerging technology, but enhancing your business with wide format printing capabilities is still a good business decision. Don Skenderian, vice-president of EskoArtwork adds that “compared to other segments of the printing industry, wide format is one of the shining lights; wide format businesses are growing at 15% – 25% annually. Other companies are realizing that they have to ‘step up to the plate’ or face problems in the future.”
With this in mind, we went out and spoke with industry leaders to get their feedback as to the state of the inkjet printing industry and how 2009 would likely shape up.
Reflecting Back and Looking Ahead
We asked these industry leaders for their input as to the current state of the wide format printing industry. According to Michael Robertson, president/CEO (SGIA), the first three quarters of 2008 were very good for the wide format printing industry: “We saw the SGIA community grow by using effective new technologies to maximize business opportunities. Equipment and consumable manufacturers continued to advance the technology, enabling wide format printers to bring new and exciting solutions to existing customers as well as open new markets.”
As we all know, the fourth quarter of 2008 was very challenging for many companies and these challenges will carry forward into 2009 and will affect all companies as well as wide format printing. However, wide format printing does have a few advantages over companies in the other printing sectors. Michael Robertson adds, “Wide format printing is still an emerging technology. New imaging and finishing capabilities being introduced to the marketplace help wide format printers provide fresh solutions to their customers. Utilizing emerging capabilities also helps printers avoid the pitfalls of commoditization.”
According to Meyer Weiss, vice-president of Digital Imaging at InteliCoat, even though many retailers and manufacturers are opting not to change signage and are running fewer promotions, on the up side, many advertisers find visual advertising to be more effective than other forms of advertising. Meyer notes that, “While companies have cut back on their overall advertising budget, cuts have been greater in terms of outlets, such as newspaper ads, magazine ads, TV ads and not as much in terms of visual ads, signage and POP advertising.”
Meyer adds that “there are some segments of the market which have been less affected by the economy. For example, digital printing has seen an increase with more printers choosing digital printing over analog. As print quantity decreases, digital printing becomes the preferred method to analog, where higher volume runs are typically required.” This is good news for the digital printing industry as a whole.
Challenges in 2009
We asked the experts what the challenges for the inkjet printing market were going to be moving into 2009. According to Michael Robertson, “no one can say for sure when we will begin to pull out of the economic downturn, but the first quarter of 2009 is shaping up to be a real challenge for many businesses. Those that can weather the storm by supporting their customers changing interests will be the business leaders as the economy rebounds. The pressure will be on management as we enter 2009. Successful business managers will make the best decisions at critical times. They will achieve the right balance of conservation and investment as they pick the areas in which to focus their business interests. It’s important for the community to stay positive and focused.”
Meyer Weiss adds that “the greatest challenge to the wide format printing industry is going to be the economy – as is the case for many industries. Although 2009 will be slow to start, we see the market moving toward continued growth in the fine art and photo market and increased adoption in the offset print market when the economy turns around.”
Doors of Opportunity
So, what are some of the biggest opportunities available to companies as we move forward into 2009? According to the most recent snapshot of the printing industry as a whole, as captured by the National Association of Printing Leadership (NAPL) Printing Economic Research Center, the commercial printing business in North America is not likely to experience any significant upswing until well into the second half of 2009 at the earliest. Therefore, printers and copy shops alike would be wise to invest in some kind of wide format printing to augment their revenue stream. The majority of inkjet printing is still being done for indoor applications. So, an aqueous inkjet printer would make a lot of sense (The Canon iPF8100 44” printers are around $7,500, while the HP Z6100 42” are around $11,600).
Andrew Paparozzi, NAPL’s chief economist states, “As an industry, we find ourselves at a unique point in history; the commercial printing industry is changing structurally as well as cyclically. This means that in addition to nationwide economic pressures, the industry is undergoing a structural change in the form of redefined markets, clients, competition, labourforce, critical skills and value propositions. As a result, the recession has created a historic opportunity for the prepared and a profound threat for the unprepared.”
Michael Robertson adds that “changes in globalized manufacturing will help U.S. and Canadian-based wide format printers. During the past several years, manufacturers have taken all types of production offshore to benefit from low cost labour. The rapid increase in globalization resulted in a loss of opportunity for U.S. and Canadian-based printers as print jobs went to other countries. But, the globalization tide is beginning to turn as manufacturers face added challenges today. The economic downturn, political unrest, currency fluctuation and a rapidly changing marketplace are just some of the concerns that have many manufacturers turning to regional vendors to support projects once sent off-shore.”
Robertson also notes that “in a tight economy, manufacturers need stability in all phases of their business. They need to maintain high-quality standards. They need to be able to change quickly as the marketplace changes and they can’t afford mistakes. Manufacturers can meet these requirements by working with regional vendors on critical projects. They can also reduce inventory and minimize surprises. Wide format printers can develop new business as they help customers find the right balance between global and regional vendor support.”
Necessity is the mother of innovation, so in a tight economy the value of innovation increases. “It makes sense that most innovative solutions are developed during times of stress. We innovate when we need to. Our community is stepping up to the challenge using the latest tools and their creative ability to develop effective solutions for their customers,” comments Robertson.
“Wide format printers aren’t just competing with each other; as a business sector, they are competing against other imaging technologies and against other forms of advertising. There is opportunity to be found by looking at the bigger picture. Maximizing creativity to provide innovative, cost-effective solutions for a diversified customer base are well within the reach of our community.”
Focusing on environmentally-friendly products will also allow companies to continue to see great opportunities. Today, consumers are voting with their dollars and are forcing companies to become more environmentally-friendly. Therein lies a great opportunity to lead the field with more environmentally-friendly products.
So, what segments of the industry will companies have their biggest successes? According to Robertson, “one area that stands out for 2009 is point-of-purchase. Consumers are making purchase decisions closer to the product these days. Retailers are reducing expenditures on wide range advertisements, such as TV and magazine advertisements. Instead, they are using more in-store promotions. This is very good for wide format printers.”
The marketplace is changing for small sign shops. Counter sales are being replaced by Internet sales. The sign shops that maximize the capabilities of Internet-based sales will dramatically expand their market.
Robertson adds that “while the immediate future is challenging, we see opportunity for long term success in virtually all of the markets served by the SGIA community. In fact, the number of markets where wide format can be successfully employed is increasing every day. As markets are developed, new and creative applications are being implemented. This diversification drives opportunity.”
Environmental responsibility has become a key issue for many customers, so how are companies positioning themselves and their products to meet the demands of “going green?”
Marci Kinter, vice-president of Government Affairs & Business Information (SGIA) comments: “With the launching of the Sustainable Green Printing Partnership (SGP Program) in August 2008, the printing industry took strong steps forward in the sustainability or “green” movement. This third-party certification program requires the printing facility to focus on their entire process rather than just one segment of it.”
SGIA, one of the founding partners of the SGP Partnership, has adopted an approach that mimics the Triple Bottom Line: people, profit and planet. A sustainable business is one that shows a profit while protecting the environment and improving the lives of the people in which it interacts. Sustainability requires that the entire system be evaluated. The SGP program embodies these principles by asking facilities to adopt a systematic approach to certifying their facilities based on a series of best management practices.
Kinter adds that “Being ‘green’ or environmentally responsible is more than just changing ink systems or substrates. While being ‘green’ is the marketable concept, the true movement is towards adoption of sustainable business practices. The commonly accepted definition of sustainability was created in 1987 at the World Commission on Environment and Development – development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
“A facility’s move towards sustainability is a journey with the intent of developing a more sustainable business model that incorporates the spirit of the aforementioned definition. There is no silver bullet for sustainability. A sustainable business is one that shows a profit while protecting the environment and improving the lives of the people in which it interacts,” concludes Kinter.
We all need to step up to the plate and put our best foot forward. Successful business managers will make the best decisions at critical times. They will achieve the right balance of conservation and investment as they pick the areas in which to focus their business interests. It’s especially important for our Canadian print community to stay positive and focused as we move forward into 2009.