14 days of critical information to prepare your shop for the year ahead.
Marco Boer, IT Strategies: After 20 years, commercial printers are finally realizing that this “toy” wide-format printing business is actually one of the more profitable segments of the printing industry. The problem has always been scaling it to their traditional high-volume, low-frequency business models. With the advent of more productive digital wide-format inkjet printers volumes and a shift in their traditional offset business to a higher job frequency, lower-run-length business model, wide-format printing is suddenly looking like a pretty interesting application extension.
Tim Greene, InfoTrends: Yes, we absolutely agree, and we think this provides both opportunity and threat to wide-format operations – opportunities to partner with commercial printers to be the source for some of that production, and even opportunities for mergers with those larger companies. I believe this will happen. But there’s also a threat: When some commercial printers get involved in wide format, they do so at a high level, meaning they spend a lot of money on the equipment. So they need to build their wide-format business quickly to recover the costs of the equipment. In doing so, there’s a risk that they’ll undersell other competitors – which just hurts everyone from a pricing standpoint.
Dan Marx, SGIA: We’re definitely seeing this, too. The strong interest in wide format by the commercial printing industry is driven by the fact that the core of commercial printing has become highly commoditized. As these companies look to escape commoditization and differentiate themselves, they’re looking to wide format – one of the few printing segments showing strong growth – as their way to do so. Should traditional wide-format be worried? Yes and no. Yes because our most crowded market/product areas will become more crowded. No because few of these companies will get deep into wide-format.
Lori Anderson, ISA: This offers opportunities for symbiosis throughout our industry. ISA recently sponsored a pavilion at Print13, designed to help commercial printers learn more about our industry. There are opportunities to build relationships between wide-format printers and commercial print operations, which can lead to enhanced business opportunities for both.
Peter Mayhew, LightWords: Yes, we certainly see this trend. It’s a “no-brainer” for the commercial printer to offer additional wide-format services to its clients. We take a positive view of this trend and don’t see it as a risk to the traditional wide-format operation – because, in general terms, the commercial-print client base is different.
Boer: I should add that traditional wide-format shops shouldn’t be too worried. While commercial printers (out of habit) might underbid them on lower-margin print jobs, the high-value print jobs will survive among the specialists because of finishing requirements. This includes mounting, cutting, grommeting, and even installation of in-store P-O-P materials and vehicle wraps. It’s difficult for customers to compare pricing on these value-added finishing operations, which offers some protection to traditional wide-format print shops from commercial printers taking margins right down to the bottom.
Miss Day 2 of our Industry Roundtable? Click here for their discussion on critical issues ahead for 2014.