A brand-new year is underway, and this is the perfect time to stop and take a moment to reflect about several of the underlying forces driving the large format printing industry, and the changes and trends we expect to see as a result.
In our humble opinion, there are three major underlying forces or “megatrends” currently driving print industry transformation:
Considering these underlying forces, we expect to see several trends that will continue shaping the large format business during this year.
Here is our top ten:
I. PRINT ON DEMAND
The print to stock model is dead. Digital printing has become mainstream and is driving on-demand printing, and now the combination of internet and the rise of digital platforms is boosting e-commerce and the growth of ‘web to print’ applications. If you are a traditional print provider, you should start measuring the amount of business you generate online and make plans to increase it to at least 50% by the end of the year. Otherwise, new 100% digital native competitors may push you out of business.
In a global and commoditized world, where everyone competes on price, you need to stand out and bring value to your customers. Digital printing is enabling several ways to create real value, either through shorter runs and multiple versions of the content (versioning) or allowing the end user to select certain aspects of the final product like the content or logos (personalization) or merely to build fully customized products and designs for a given customer (customization). In any of the forms, the value created helps to differentiate against mass-produced prints and will increase brand value, customer satisfaction and loyalty. All the technologies needed for personalization already exist, and this year we should get ready for a boom in this area.
III. NEXT DAY... AND WHY NOT SAME DAY?
Another consequence of the internet boom and digital platforms is that customers are well accustomed to receiving goods in an instant. In printing, we have seen the reduction of lead-times from weeks to days, driven by the popularization of digital printing. But now as the number of online orders grow, we are starting to see a shift in delivery times, from days to hours, forcing the print service providers to deliver the same day or next day at the very latest. You need to keep up with customer demands, personalized and with same day delivery, are you ready?
IV. LOCAL FOR LOCAL
Globalization is a reality and has driven a lot of production centralization in low labour countries for economies of scale. But as the markets move digital you also need to compete locally, with the ability to respond to personalized jobs delivered the same day, or next day at the very latest, driving a need for nearby production that reduces logistics costs and delivery times. While there is still a big demand for centralized mass production (that will remain) the growth and value-added applications will be created by local production, moving to a distributed network model of micro-factories located close to the customer. We see this model developing with some of our customers already, and we expect this to become a mainstream model towards 2020.
V. VERTICAL INTEGRATION
We have seen already a lot of consolidation in the printing industry, and this year the trend will continue. The main difference is that until now majority of the moves has been ‘horizontal’ when print providers or manufacturers acquire or merge with other companies to become bigger and more global. To counter this, in the foreseeable future, we will begin to see more ‘vertical’ mergers. Those alliances or acquisitions will be used to make companies stronger with the implementation of an end to end strategy in the complete ecosystem of the business, and not only from a capacity point of view. We expect to see this at many levels, from equipment manufacturers to print providers, offering from design to production, end to end solutions.
VI. THE FADING OF PVC AND THE RISE OF FABRICS & BIO-MATERIALS
As far as printing is concerned, the media or substrate has the most substantial environmental impact. And among all popular materials, PVC is the least sustainable option. Not only is it one of the most used material in banners, vinyl’s, displays and wallpapers, to mention few, but it’s also a heavy contaminant: It is non-recyclable, non-biodegradable long lasting plastic. A few countries, among them India, has already started to ban the use of PVC in printing, and several more Eco alternatives are beginning to take the stage like polyester-based fabrics. Polyester is often made from recycled sources and can be recycled, again and again, increasing the chances of circular production. We will also see the emergence of the new category of substrates, using bio-degradable materials that can be safely disposed of in landfills.
VII. PAPER WILL BE BACK!
In this context of increasing regulations around sustainability and printing materials, we expect to see a renaissance of paper-based applications. On the one hand, several companies are working on new materials that can compete in durability against PVC banners or boards, for a 3-6 months campaign. There is also considerable interest from the packaging industry to move into POP displays, using their core capabilities of high-quality paper-based foam boards. On the other hand, cities are becoming greener and putting stricter regulations in place. We expect to see a boom of paper-based applications, especially in indoor retail and POP segments, but why not in outdoor advertising used in cities?
VIII. WATER BASED INKS
This is nothing new, but we will continue to see the shift of the large format printing industry towards water-based inks due to the pressure on employees’ health and safety. Solvent and UV-Curable inks are dangerous goods, even if they are Green Washed with the ‘Eco’ stamp. The increasing pressure from regulations are forcing all ink manufacturers to focus their developments on more safe and sustainable inks, most of them being water-based. The paint industry already shifted to water-based some years ago, and companies like HP are driving forward a complete shift with technologies like HP Latex inks or the new inks for the packaging industry, used in the HP Page Wide C500 press. Other companies have also announced the use of water-based inks, and we expect others to follow suit.
IX. BLENDING OF DIGITAL AND PRINTED SIGNAGE
A trend that has been going on for a while is the proliferation of digital screens, in some cases even replacing printed applications. We have seen this in outdoor billboards, in airports and some high-value stores. As screen prices go down, there will be a natural increase in the use of digital screens, although we believe it is not going to replace printing significantly but even make it grow. For every screen placed, several new applications are emerging as an opportunity for print, driven by the creativity of the print service providers and the endless applications that new technologies like HP Latex are enabling. Screens will be used selectively in shops and spaces, regardless of the still high relative cost involved; but there is, of course, a negative counter-effect associated with bombarding the customers with moving images, so the use will be contained. Meanwhile, the rest of the surfaces around the screen are potential targets for creative printing, and we expect this blending to continue growing this year. An if you still don’t believe it, just go to a digital screen show and see the amount of printing they have in their booths…
X. VALUES AND TRANSPARENCY
We´ve left the most poignant part for the end. In today’s world, consumer power has been boosted by the presence of social media networks, and there are many NGO’s and consumer associations with their eyes on the actions of big corporations. Consumers are not only buying products based on their quality and price but also based on the social values of a company and how transparent and fair they are. We have seen positive change emerging in big corporations, and it will progressively move on down the chain. If you want to be successful, just having a good product may not be enough, you also need to possess social values and show transparency; to ‘walk the talk,’ enabling your customers and the customers of your customers to trace and evaluate your actions.
I hope this article has been useful to you and has made you contemplate a few ways in which you can improve your printing business this year. Regardless of what tomorrow brings, we´d like to take this opportunity to wish you a very successful 2019!