Digital printing technology will be crucial to the survival to print service providers’ survival and the key role it will play as the industry comes out of recession into a transformed business landscape, the latest survey of Canon Europe called 'Redefinition of the digital printer' reveals.
As 2009 closed, print providers reported glimmers of improvement. However, the report cautions that exiting the downturn brings its own challenges. Those print providers which trimmed their workforce need to re-hire and train, while all businesses have to focus on growth sectors and develop strategies to satisfy them. Asked to identify the sectors with the most potential, respondents chose photobooks (87.2%), short-run advertising collateral (84.9%), versioned promotions (74.7%) and short-run publications (65.3%). Printers are however still cautious about any capital investment unless it has an immediate impact on productivity and profitability, but they indicate that their top three areas for investment in 2010 are implementing or improving an automated workflow (56%), expanding finishing options (49%), and expanding digital printing (48%).
The report reveals that the downturn impacted an industry already feeling the twin effects of electronic substitution of printed products and geographic displacement of print production. To these were added deep cuts in organisations’ marketing budgets. As the report notes: “Most business organisations cut every aspect of their costs, and print suffered accordingly.” In practice, customers either stopped ordering print, substituting it for electronic forms of communication, or reduced orders, putting pressure on their print providers to cut prices.
The report estimates that some print service providers could have seen volumes fall by as much as 55% and these print jobs tended to be produced more frequently and in shorter runs – 69% of Western European printers saw the number of jobs increasing. Unsurprisingly, these trends saw revenues from offset litho decline by 18.1% compared with 2008 as legacy presses were unsuitable for these shorter runs, while revenues from digital output (toner and inkjet combined) rose by a total of 27.2%.
Digital printing saved us
Having digital printing capacity was therefore crucial to print service providers’ prosperity and a common comment from the survey was ‘Digital printing saved us.’” Over half of those with digital printing reported increases in profits or revenues compared to only 31.7% of non-digital businesses.
Developing new products and markets were key characteristics shared by successful print service providers. The survey found that the print markets that performed especially well had implemented digital printing. For example, 86% of respondents said display printing on wide-format printers had helped them survive downturn.
A further key factor in survival was offering services that added value to the printed job, which according to the report “are specialised enough that pricing is less competitive and thus add value and profit to a job.” A prime example is value-added finishing - 80% of respondents cited coating as a case in point.
Selling digital is a serious business
The survey identifies significant changes in the way digital print is sold and bought. The decline in substantial offset litho jobs, which generate good commissions, has encouraged salespeople to market digital print seriously. This trend coincides with an estimated 20% reduction – through redundancy - in the numbers of print buyers, and the integration of the print buying role with graphic design and, in many cases, with the purchase of other media. This trend provides a good opportunity for print providers who offer multimedia services such as PURLS. It also points to continuing growth in e-procurement using web-to-print: over half of print buyers already use some form of e-procurement, and 40% of the large-to-very-large organisations report savings of 10% to 25%.
“It is clear from the Insight Report that succeeding businesses’ are making the leap into digital printing or new revenue streams,” comments Mark Lawn, European Marketing Manager, Professional Print, Canon Europe. “Digital printing is now a non-negotiable requirement of any print business and they need to be more adaptable, creative and confident if print is to maintain a role in tomorrow’s mix of media and communications channels.”
Lawn is also keen to stress that at the same time, print service providers have a right to expect more from their digital suppliers. He continues “Getting the right digital press is important, but it’s about much more than that. Suppliers must also be partners and consultants. Last year’s 78% rise in attendance at our Essential Business Builder Program of business development workshops shows the appetite in the market, and we intend to meet that demand to help printers secure the future of their businesses.”