2009 State of the Industry - Part Two
In Part two of this year’s State of the Industry Report, we’ll focus on the future aspects of the market: what areas show the largest opportunity for growth, what technology will drive change forward, and where we see ourselves in one year’s time.
“Most shops have cut their resources in-line with the decline in demand for their output. A few took the decline as an opportunity to become more aggressive and capture share (by way of lower prices) from competitors,” said Marco Boer, vice president, IT Strategies.
Some have focused on improving their internal operations and their core businesses, strengthening their presence in the market. “Some shops have focused on improving their operations with efforts that not only save long-term costs but contribute to sustainability—such as switching from propane-powered forklifts to electric forklifts and installing energy-efficient lighting,” said Masters.
Diversification
While some businesses hunkered down, others found that offering new services and expanding their customer-base, helped them remain afloat.
“The shops that are very specialized were hit a lot harder than the shops that cater to a variety of markets. This makes sense, considering that when one industry is down others might be in better shape,” said Ed McCarron, director of marketing, Digital Imaging, InteliCoat. “More shops are diversifying, going after as many industries and applications as possible. Shops that are able to serve multiple markets tend to do better during tough times.”
The IRGA’s Bova, agrees. “There has been a trend toward diversification, right-sizing and charging for services that may have been included for free before. However, competitors are hungrier than ever. We continue to see accelerated price erosion as companies compete for less business in the traditional marketplaces.”
“We’ve seen shops bring new services under their roof. Whether it’s design or installation, more firms are touting themselves as one-stop shops,” said Florek.
Technical Innovation
As the industry recovers, technological advances in printhead technology, print equipment, and inks will help to drive the market forward. “Digital printing is king,” said Alcan’s Masters, and the current economic situation has aided in the shift from analog to digital technologies. Digital allows PSPs to print short run jobs without incurring high costs for materials and labor. And many of the projects from marketers have moved toward much more targeted and shorter run lengths in an effort to keep their marketing costs down—which is perfect for digital.
Experts pointed to three areas where innovation has—and will continue to—push the market forward: UV technology, latex ink, and automation.
UV Technology
According to IT Strategies’ Boer, UV-curable inkjet technology continues to help print providers address a broader range of applications, allowing them to take on incremental business. “This is important because it is not displacing existing revenue, and it is growing the size of eligible revenue.”
Lyra’s Florek continued: “UV-curable hardware and inks have been the star of the industry. The Great Recession has hit the UV-curable segment as well, but we expect that segment to bounce back more quickly. The prosperity of the UV-curable segment will likely come at the expense of the relatively saturated solvent segment. Especially if price points for UV-curable printers come down, smaller PSPs will likely replace solvent devices with UV-curable ones to widen their capabilities and print on new substrates.”
“UV flatbed technology continues to dominate our ability to deliver a wide array of products quickly and efficiently,” said Catherine Monson, chief executive officer, FASTSIGNS International, Inc. “Although the acquisition rate has slowed, some of our centers have acquired new equipment this year. UV flatbed printers allow our centers to reduce their cost of goods and labor while maintaining or increasing their production capability.”
Latex Ink Technology
According to some experts, Hewlett Packard’s development of the new latex ink technology will be a key component in driving change in the coming years.
“There have been some interesting developments in the market in terms of printers—for example, the latex ink printer platform from HP is representative of the future of printing technologies,” said McCarron.
