Market Update: Quick and Small Commercial Print

The year 2009 closed with a glimmer of optimism about the economy and a touch of pessimism about any major printing industry growth in 2010. Only a third of printers in NAPL’s latest industry survey expect business conditions to improve during the next six months. However, that’s a marked improvement over the 9.8 percent that predicted better business conditions in December 2007. NAPL predicts that industry printing sales will grow between 2 percent and 3 percent in the coming year. We’ll see.

Traditional ink on paper printing continues to decline, but still accounts for 56 percent of total sales in the industry as a whole, according to NAPL figures. Meanwhile, digital print sales and value-added services now account for 37.8 percent of sales. More and more quick and small commercial printers have both digital and offset capabilities, with digital driving growth in their short-run color and variable data offerings.

“New normal” is the current jargon for the systemic changes taking place in the printing industry as it moves from just ink or toner on paper to more sophisticated communications offerings. Behind all the jargon is the simple fact that in order to succeed in this changing environment, quick and small commercial printers will have to do more than take print orders. They will have to help their customers communicate effectively, no matter what the method or medium. To do this they have to know their customers’ businesses and objectives, which will require a lot more effort and interaction than simply bidding on jobs.

Trade Shows

It should be no surprise to anyone that attendance at printing trade shows is in decline. That has been the case for some years now and has been accelerated by the dismal economic picture of the past year or so. Even the unprecedented move by the Graphic Arts Show Company to lay out a couple million dollars to help vendors defray the cost of bringing equipment to Print 09 did little to slow the decline in attendance, which clocked in at just under 20,000.

The GASC-run Graph Expo and Print shows are major income sources for the three main printing associations—PIA, NAPL, and NPES—which set up GASC. These shows have become even more important to the three as income from membership dues and programs has declined. Meanwhile, over the past few years GASC has eliminated four regional shows in response to declining attendance and vendor apathy. Considering how vital Graph Expo and Print now are to the income streams of the three trade associations.

The two other major annual U.S. shows are On Demand and Graphics of the Americas, both of which also have seen sagging attendance. GOA draws heavily from South and Central America, but is not the major draw for U.S. printers that it once was. On Demand, which co-locates with AIIM, is a digital show that attracts non-printer attendees. Despite this slightly more diversified audience, the show has recently failed to attract some major industry exhibitors. That said, these two shows will likely remain on the calendar for the foreseeable future.

What’s to come? Well, Graph Expo/Print has already been branching out to attract exhibitors and attendees from other industry segments. It will have a special newspaper section next year, which in light of the state of the newspaper industry seems grasping at straws. Other forays into such areas as wide-format and mailing may have broadened the pool of potential attendees, but they also compete with stand-alone shows specific to those industry segments. Meanwhile, some major vendors have already opened comprehensive, customer-focused centers where they can bring prospects on a more exclusive basis for in-depth looks at what they offer. Combine that with the increasing significance of the Internet as an avenue to connect buyers and sellers and it seems that the best today’s trade shows can hope for as the economy improves is stabilization at current vendor and attendee levels.

Associations

Association membership has also been in a decline from its most recent heyday of 10 or 15 years ago. Part of this has been because of a lack of perceived value as several benefits once reserved for association members are now available from other sources. Often times association members can get better deals on pricing than what is offered by association agreements with vendors. Then there is the problem of delivering services where the members live. At one time both PIA and NAQP had strong chapter structures that could deliver benefits and education to those members unable or unwilling to travel to annual or semi-annual conferences or educational events. NAQP is now part of NAPL and only its annual Owners Conference remains intact. PIA also has been losing membership at the chapter level. Meanwhile, NAPL has adopted a pay-to-play menu for many of its service offerings. None of this is conducive to growing membership.

There have been calls for the consolidation of NAPL and PIA into a single association. In some ways that might make sense, but it risks depleting the perceived value even more. Those who see value in both NAPL and PIA probably already belong to both. Those who don’t have chosen one or the other. That said, there is always room to for cooperation. That can be seen in the recent announcement of the combining of the “leadership” conferences of PIA, NAPL, and NPES, the suppliers association, into one major event in 2011.

Bottom Line

In 2010 we will see sales rebound slightly for the industry and grow even more for those quick and small commercial printers who have recognized the systemic industry changes and planned for the economic recovery. Digital printing and ancillary services will continue to grow. Consolidation will continue for both printers and vendors. Trade shows will hope for a rebound in attendance and associations will look for other avenues of cooperation short of merger. It won’t be a great year, but it won’t be as bad as 2009.

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