Wide-format Strategies and Opportunities
In July, the second annual Wide-format Summit took over the PGA National Resort in Palm Beach Gardens, Florida. The invitation-only event saw 25% gains in both attendees and exhibitors over the inaugural event held last summer.
The summit started off strong with an opening keynote presentation by Conference Chair Marco Boer, VP of IT Strategies, who discussed “How the Lingering Crises Are Amplifying the Benefits of Wide-Format Printing.”
“We’re not back to normal, but it’s back to better,” Boer told attendees. Today’s wide-format printers face several challenges that resonate across the entire industry, he said. They include:
1. A lack of substrates and paper. Though Boer doesn’t see that changing any time soon, he noted, “What it does do is make things that have to be printed far more valuable.” Margins on print jobs have steadily decreased over the past two decades, he said, but the silver lining is that printers have a chance to gain some of it back. Savvy shops will make the case for the higher value of the work, and the best part, Boer noted, is that customers won’t push back much, if at all, since they see higher prices everywhere they look.
2. Labor challenges. “This is something everyone struggles with,” said Boer. There are a number of reasons for this, he noted, including many employees putting far more focus on their quality of life, and choosing to value things like flexible work hours and more time with their families. Also contributing to the problem is a decline in birth rates, so fewer young people are available to replace those leaving the workforce.
3. Private equity is buying up shops. “They are coming into this business, and they love us,” Boer noted. They are purchasing a number of shops, and they are focused, not on the art of producing high-quality printed pieces, but on the bottom line. “A private equity will come in and change a shop from an artisanal business competing on service and quality, to one that is data-driven, where it is all about the numbers,” he lamented.
That said, there are ways for printers to counter these challenges. Automation is a big one, said Boer — removing touch points and replacing older equipment with newer machines that are faster and more productive. Shops should also be looking for opportunities, including ways to add value to existing customers and jobs, but also looking for new business and opening up new markets and verticals that were previously untouched.
All About Automation
Attendees came to the Summit for a range of reasons.
“We wanted a fresh sense of what’s happening in the industry,” said Craig Rogers, wide-format area leader at Vivid Impact. “We’re seeing a lot more automation, and a supply chain that’s not as ready and open as it used to be.” In particular, Rogers found the summit’s panel discussions insightful, noting they enabled him to “see my business in other people’s view — it connects us with them.”
One of those panel sessions was led by Denise Gustavson, editor-in-chief of Wide-format Impressions magazine, titled “The Automation Audit: How to Identify and Streamline Your Operation’s Weakest Points.” Joining her were Trai Majors, VP of operations at Firehouse Image Center; Alan Stratton, color team manager at The Bernard Group; Bjorn Bedore, graphics technical advisor at Olympus Group; and Jason Hamilton, chief innovation officer for Innovative Displays.
The panel discussed the ins and outs of automation, and a few tips emerged that other wide-format printers considering more automation in their operations can learn from.
- Look at everything and see where the bottlenecks are. Those are the areas to focus on first when it comes to automation. You don’t have to go from zero to 60 all at once — start with automating specific areas of the business and then expand from there.
- While having automation features on a press is great, the real major impacts to the business will come from the front-end and eliminating touch points as the file moves through the business, from estimating all the way until it gets to the press.
- Top-down is key. Management must be completely on board with the changes to the processes that automation brings, and it’s up to them to ensure staff understand how to use the systems and why the shop is automating in the first place.
- Speaking of staff, there will naturally be some fear that automation will push employees out of their jobs. The best way to get them past that is to get them involved, find out what parts of their jobs aren’t working or could be improved, and focus on automating those areas. No one likes to do repetitive, mindless tasks, and automation can actually help staff focus more time and energy on what they enjoy doing.
- Not everything can be automated internally; at some point you will hit a wall. This is when having the right partners becomes crucial.
- Don’t focus on the up-front costs of implementing automation throughout the business; that is deceptive. Instead, focus on the long-term gains in productivity and efficiency, and what that will ultimately bring to the business. The ROI isn’t going to be an instant return, but it will be one that compounds the longer the new systems are in place.
- Go into automation with an open mind. The places where your shop might benefit the most might be different than you first thought. Take the time to understand how jobs are moving through your shop.
A Glimpse Into the Future
For the final keynote session of Wide-format Summit 2022, Gustavson was joined by Andy Paparozzi, chief economist of PRINTING United Alliance. Paparozzi took the stage first, opening with “All signs are that we’re headed for some difficult times.” Disruptions to business from the pandemic and the supply chain are only going to continue, he warned.
“The American economy will be slowing down, most likely right into a recession,” he predicted.
On the surface, he noted, things look good, with most shops reporting growth — sometimes in the double digits — for their sales in the next 12 months. But digging deeper, Paparozzi said, you find that operating costs are expected to rise 8.1% on average in the same time frame, and almost half of printers are reporting that they expect costs to rise just as fast as sales. So, profitability and the bottom line not only won’t see a benefit from the rising sales, but might actually start to fall.
The harsh reality, Paparozzi stressed, is that unprecedented uncertainty itself is the biggest challenge right now. Shops can’t predict demand, costs, or even substrate availability, and the wrong move could make things worse, not better.
“So what are we going to do about it?” Paparozzi asked. By far, the number one strategy is to increase productivity. That can be accomplished by increasing automation throughout every facet of the business, by investing in capital equipment that is faster and more efficient, by streamlining workflows, by a better use of MIS systems, by a better use of data in general, and even by using principals such as lean manufacturing to improve the way work flows through the facility.
Paparozzi stressed that while the outlook for the economy is weakening every day, shops can prepare for it. First, he said, don’t assume that because you’ve survived past recessions that you’ll make it through this one; every recession is different. Second, don’t assume you can cut some costs and then sit back and wait the rest out; that’s not going to work. Finally, use any one of a number of intensive tools to help you evaluate new opportunities for your business, since that is the way shops will not just make it through the troubled days ahead, but will come out stronger for it.
“All of the indicators suggest we’re heading for some tough times, but that’s okay because we know what to do,” Paparozzi said. “We can turn those difficult business conditions in our favor, and make them the competition’s problem. We can peruse opportunities while the competition is retrenching.”
As for what those opportunities are, Gustavson took the stage to take a closer look at some of the trends driving the marketplace, and how printers can turn them into new market segments.
“There are a lot of things you might be doing right now,” she said, “but there are a lot that are adjacent to what you’re doing right now.” And those are the markets where shops should be looking for opportunity.
One trend she highlighted is privacy concerns — 74% of people are concerned about data privacy and the use of their personal information for ad targeting. Both Apple and Google, Gustavson said, have responded by releasing new tools and settings in their mobile operating platforms making data tracking and sharing opt-in, rather than opt-out. That, in turn, is cutting brands off from a valuable source of information that has helped them target consumers in recent years.
This means that out-of-home (OOH) advertising is seeing a surge in popularity. You can skip an online ad or ignore digital marketing, but you can’t turn off a billboard, Gustavson noted. You can’t ignore a weird-colored car with an eye-catching wrap driving by. These are opportunities for wide-format printers to connect with brands and find new and innovative ways to capture the attention of consumers without the use of tracking data.
At the end of the day, Gustavson noted, 80% of printers are looking to move into a market segment other than their own — and most are looking at wide-format as a prime vertical to explore. To defend ourselves from the onslaught, she said, wide-format printers need to look at other things they can offer to converge in the other direction. Can you capture more market share from your customers by offering products like direct mail or marketing materials before the commercial printer currently producing those items starts offering the signage as well and takes the business? These are the types of ideas wide-format printers need to consider if they want to survive the turbulent waters ahead.
That’s just a glimpse of what attendees experienced. If you want to participate in next year’s Wide-format Summit, be sure to visit wideformatsummit.com to find out more. Until then, make sure to join the wide-format community in Las Vegas, Oct. 19-21 for PRINTING United Expo.