Will 2020 be the “re-evolution” of the printing and graphic arts industry?
The end of an exciting 2019 is a perfect time to reflect on the year ahead. All indicators point to 2020 being a pivotal year for our graphic arts industry – and for more reasons than just the sheer fact that we have a drupa year coming up. We’ll obviously have the continuation of new product launches, both hardware and software. That’s just one aspect of what’s ahead for next year. Technology changes will continue to improve print productivity efficiencies and we’ll see the introduction of an ever-wider gamut of print applications. These technology changes should culminate at the drupa 2020 exhibition, in Dusseldorf, Germany, which is being held from June 16 – 26. The other aspect of what’s ahead for next year is the acceleration of printing’s business model changes – a less tangible aspect compared to the technology changes. Changing the graphic arts business model, however, is an existential challenge to our industry. I’ll elaborate on both these changes and their impacts on 2020.
Changes in technology
Four years ago, drupa 2016 was heralded as drupa Inkjet 2.0. We saw major introductions of new inkjet products and/or inkjet product technology announcements. These basically transcended across all printing segments including commercial, packaging, label and wide-format. There’s no doubt that next year we’ll once again see an increasing emphasis on inkjet technologies across all segments by all major original equipment manufacturers (OEMs). We’ll undoubtedly have drupa Inkjet 3.0, with a focus on increased uptime, higher productivity, increased range of applications on a wider selection of substrates, improved print quality, a higher level of consistency and repeatability, and so on. The year 2020 will also see production inkjet technology go more mainstream.
In general, three factors will drive the success of digital printing technology, with a fourth factor specifically driving the success of inkjet technology in the graphic arts Industry. These factors will be (1) an increasing demand for shorter run lengths; (2) faster turnaround times; and (3) the need for variable/versioning printing. Again, this will occur across virtually all segments: commercial, packaging, label and wide-format. Although toner technology drove the first wave in the success of digital printing by offering an answer to the three factors I just mentioned, the technology was inherently limited in speed and productivity, especially compared to offset. Inkjet technology picks up where toner technology left off, adding the fourth factor for success – speed and productivity.
Digital printing technology, in general, will clearly be driven by ‘heavy’ data processing. This data processing dependency has in turn shifted the print production complexity upstream in the process, moving it from the press to the prepress area. As such, we’ve seen major strides in the development of workflow, colour management and data-management software. This is also expediting the automation of the printing process, from file intake to finished product. It’s fair to assume that we’ll see further enhancements of these processes in 2020 and we can expect an accelerated integration from prepress and press functions in the printing process.
It’s important to understand, however, that print is but one component within the multi-channel communications platform that now includes the web, physical storefronts, e-mail, social media, direct marketing, etc. The technological changes in the graphic arts industry, in both hardware and software, are increasing the relevance of printing within that multi-channel communications platform. Which brings us to the next topic.
Changes business models
The changes we’ve been most familiar with so far in the graphic arts industry have been based on consolidation. Started in the mid-nineties, with growing challenges created by an overcapacity of printing press availability (and subsequently aggravated in 2008 with the start of the financial crisis and compounded by the impact of the internet), consolidation in the printing market became the prevalent business model. We’re now pretty much at the end of that particular cycle.
The earlier mentioned technological changes are creating new business models, not based on a one-dimensional consolidation model, but rather on a multi-faceted two-dimensional model driven by (1) convergence and (2) job-ticket expansion. The positive impact of the technology changes is increasing the relevance of the graphic arts industry within the multi-channel communications platform. Moreover, clients are now driving their communications strategy of specific sales campaigns through multiple channels. The combination of new technologies in the graphic arts industry and the growing requirements of clients driving their sales campaigns through omni-channel marketing, are creating new opportunities for our industry. Those savvy enough to recognize these opportunities are adjusting their business models to a two-dimensional model. They embrace the convergence between segments (commercial, packaging, label and wide-format), but are also expanding their job-ticket offerings upstream and downstream.
With convergence, we’re seeing printers adding capabilities from adjacent segments. Commercial printers are adding wide-format, packaging printers are adding label-converting capabilities, and many other possible cross-segment combinations are occurring. This manifested itself clearly this year when we’ve recorded an increase in cross-segment acquisition activities. Expect this trend to accelerate in 2020.
With job-ticket expansion, we’re referring to those printers who are getting deeper involved with their client’s communications campaigns. Not only do they get involved across segments (for example executing on their direct marketing print as well as their display graphics work), but they also get involved in their client’s upstream and downstream services. Let me elaborate.
It is no longer hypothetical for a graphic arts company to get involved with most aspects of a client’s communications campaigns. When a client, for example, wants to launch a product or service, they use omni-channel marketing to reach their target audience. The graphic arts company can get involved with the overall and individual design of most of the campaign components. They can perform the data analytics; design, produce and deliver the direct-marketing campaign; drive the e-mail blasts; design, produce and install in-store displays, banners and posters; design and produce special packaging; offer kitting, shipping and fulfilment services; and even measure response rates. This new two-dimensional business model of convergence on the one hand, and job-ticket expansion on the other hand, can be quite challenging. The convergence aspect is blurring the lines between the established conventional segments as we know them, and the job-ticket expansion is moving into related but new services.
The advantages however are obvious. A printer or graphic arts company can clearly increase their ‘share of wallet’ with their existing client, generating additional net new revenues while substantially strengthening their business relationship. The client, in turn, has fewer touch points within their overall campaign, increased control over all aspects of the complex mechanics of the omni-channel campaign, fewer hand-offs between suppliers, and the ability to put more emphasis on the content of their messaging rather than the process – all the while shortening the go-to-market timing of the campaign.
Opportunities await us
The changes in technology are giving the graphic arts industry the means to take advantage of this two-dimensional business change: convergence and job-ticket expansion. This, in turn, will create the potential to assume a much bigger role in the client’s overall communications strategy. After all, digital print files are oblivious of which segment they belong to. Workflow management, colour management and data management make it relatively seamless for those files to transcend across segments – whether commercial, packaging, label or wide-format. In 2020, we’ll see this trend solidifying, and the graphic arts industry further enhancing its relevance in omni-channel marketing. An exciting time indeed!