PRINT IT

 

 

This blog is by our guest blogger Tim Greene – a.k.a The Wide Format Guy – who is Research Director at IDC, responsible for the large format printing, 3D printing, and digital signage markets. Catch him live at our special upcoming Webinar: Super-Sized 3D Printing – Refreshing your Print Service with New Revenue Streams, February 27 at 12PM EST.

 

 

In a recent IDC study, “maintaining profit margin” was cited as the top challenge to the large format printing industry today.

How did we get here?

Large Format Business Challenges

For many years, large format printing has been characterized by high margins – of course you can make high margins when you can sell large format graphics for $8 – $10 – $12 per square foot. A lot of pricing is local of course, but in many cases those days are over … we recently talked to a shop that told us that years ago, they were able to sell backlit large format prints for more than $10 per square foot – nice high margins there – but now that same type of large format graphic is selling for less than $2 per square foot.

The large format digital printing market is huge. IDC pegs the value of large format digital graphics to exceed $22 billion in 2019 and the market is still growing albeit at an unsexy – 4%-6% rate. Total growth is constrained by the fact that the top 5 large format digital print applications (POPs, posters, signs, banners, backlit displays) make up more than 50% of total large format digital print revenue. The core large format business is becoming increasingly commoditized due to mounting competition from all over the market:

 

  • Repro shops, (people used to call them “blueprinters”) have moved into color graphics
  • Sign and screen printers that have “gone digital”
  • Internet companies and wholesale printers that use their automation and SEO capabilities to attract on-line large format print buyers and price shoppers
  • Commercial printers that have moved into large format digital, attracted by growth and higher margins, and the desire to gain share of wallet among their customers.

 

As such, large format printing PSPs are often struggling to find a differentiator/competitive advantage. In the past, one of the things that differentiated strong and profitable large format print shops from newcomers has been service – the ability to turn jobs around really fast. Our research tells us that up to 70% of large format print jobs need to be fulfilled within 48 hours of the time they are placed. This puts tremendous stress on large format PSPs but it isn’t the differentiator anymore because a lot of the digital equipment is so fast that everyone can turn jobs around fast. And you can’t differentiate on quality to many print buyers either because either they don’t know the difference, or with the large format digital equipment available today, even relatively low-end equipment can make beautiful quality large format graphics. Also, while many shops try to meet customer demands by investing in new large format printing equipment that will help them print faster or produce for lower cost, others are looking for the ability to print onto fabrics so they can compete in large format graphics-type niches like décor and fabric printing. IDC believes even these are going to become commoditized because there is so much equipment available and the barriers to enter those markets are so low. The trend to faster production and lower prices is a response to customer demand, as marketers are increasingly asked to do more with less. Marketers are looking for new ideas, new materials, and new services that can help them achieve their communications and business goals.

All of this has created a need for many large format print service providers to look for new ways to attract and serve customers to drive new revenue and profit opportunities.

IDC believes large format print shops should be looking for tools they can use to help them evolve their business because those competitive and price pressures are not going away. We’ve been advising large format print shops to evolve their business model, to move away from selling on a “cost-per-square-foot” basis to selling on a “project” and/or “program” basis that allows shops to charge for the valuable services they provide.

Super-Size Opportunity

One of the areas that we think is creating exciting opportunities is with super-sized 3D printing. We’ve gotten to speak to a couple of the companies that have them and these systems are helping these users overcome their large format PSP business challenges in some really interesting ways.

Super-sized 3D printing is in its very early stages, there are only about 100 of these printers installed worldwide, so there is a great opportunity to differentiate with this technology. Supersize 3D printers are used to create large shapes that make point-of-purchase displays, in-store fixtures, trade show booths, and public advertising campaigns much more interesting than typical 2D signage and graphics. The shops that have them report that they have been able to introduce the technology and their new supersize 3D printing capabilities to customers because the output is really cool, fun, and eye-catching, i.e. “effective”. The in-store merchandisers and designers are intrigued to see it, and when they start to see some of the output, they start to imagine ways they could take advantage of it.

 

thermoformed illuminated elelment
In-store signage combined with super-sized 3D printing

 

Increasingly, brand marketers are deploying more advanced marketing techniques such as hyper-local marketing (targeting communications down to the demographics of a city or town or even a part of a city or town), which demands more data and more feedback about the audience for marketing campaigns, which requires insightful data about the locations, demographics, and relative effectiveness of their separate advertising efforts. Also, in this age of digital marketing and social media manufacturers and advertisers want to “go viral” and the large shapes and creative visuals that can be created with supersized 3D printers has enabled that.  The word is “buzz” and large format print shops that have invested in supersized 3D printing have created “buzz” that has created new opportunities with existing customers and attracted new customers that saw the campaigns and decided to create their own campaigns using these customized large shapes. The print shop owners that have invested in super-sized 3D printing also say their own employees get inspired because these new capabilities show that the company is adopting new technology and exciting new business.

Super-sized 3D printing capabilities give shop owners new opportunities to sell their services and to sell them on their own terms, as part of a larger project or program. In most cases, the super-sized 3D prints are part of a total project that includes digitally printed signage and graphics, so these shops that have them are able to offer more services to capture additional revenue, but also elevate the sales model to a more consultative approach.

In order to survive and overcome the commoditized large format printing market, print shops need to change their mindset and ensure that their business evolves. Super-sized 3D printing, for most shops, would be a new capability that offers customers a chance to improve their business results. In turn, it helps shops change their selling approach and add revenue and profit to their business.

In an upcoming webinar we’ll talk a lot more about some of the specifics of large format PSP business challenges and connect with a user of a Massivit 3D supersize 3D printer who will talk about how it is changing his large format business, attracting new customers, and generating tangible growth. Register for the webinar: http://bit.ly/2BBBzTn.

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