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Navigating the Wide-Format Sea

(October 2009) posted on Wed Oct 28, 2009

Five industry experts scope out the year ahead.

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Bill Dundas, ISA: The latest economic forecasts and the recent performance of the stock market portend a recovery that begins to build momentum during the fourth quarter of this year. Because demand for commercial signs and graphics typically is a precursor to stronger growth in the larger economy, we expect to see significant improvement in business conditions by the end of the year and extending into 2010. But a persistently high vacancy rate in retail shopping centers and other commercial properties seems likely to moderate this growth, particularly in comparison to the rate experienced prior to 2008.

Florek: And I’ll add that while I think there will be a rebound, I believe it will be far from robust. Overcapacity is the principal problem that the wide-format market faces. For example, the number of reprographic firms and sign shops is still too high and is likely unsustainable—so we expect the shake-up in the industry to continue in the short run. This is not unusual, though, since a high number of firms tend to exit the market at the end of an economic downturn. Another worrying sign has been the drop in advertising spending. Spending on out-of-home advertising has stabilized. The problem is the level of spending in 2009 has fallen 15-20 percent from the comparable period from a year ago. Surely, out-of-home advertising spending will begin to rise again, but corporations have slashed their marketing budgets, and the downturn has led corporations to  become vigilant in eliminating wasteful spending.

Williams: The sustained market loss of revenue over time is driven by the accelerated decline of some already mature sectors. Aqueous and low-end or “eco” solvent get hit hard and [will] only come back partially. UV is temporarily held back, but will then accelerate its growth at the expense of other technologies.

Print service providers are trying a variety of options to combat the down economy and bring in more customers and jobs to their shops. What are some of the more intriguing ways and options you’ve come across?

Greene: There are at least two sets of strategies: Sales strategies and operational strategies. I have seen companies trying everything on both fronts to reduce operating costs and making strategic investments to try to drive new sales by selling new applications.