Top Shops 2011: The X Factor
The Top Shops of 2011 proved that while it might not be easy, it is possible to grow revenue and expand in difficult and uncertain times.
Like the numbers last year, banners and signs (19.22 percent) make up the largest application on average for the shops with retail and POP displays (15.90 percent) and exhibit and trade show graphics (15.58 percent) pulling in a close second and third respectively. Fleet and vehicle wraps (11.75.09 percent) pull in the next largest segment of business, up a percent from last year. Fabric and textile printing (8.95 percent) saw a nearly three percent increase. Engineering drawings (7.30 percent), specialty graphics (4.23), fine art and museum graphics (5.58 percent), backlit display graphics (4.72 percent), billboards and building wraps (4.34 percent), posters (3.61 percent), décor (2.86 percent), and other applications (1.35 percent) round out the rest of the applications.
New Market Opportunities
While 2010 saw growth in some markets, where will new growth come from? The Top shops are looking at a variety of avenues to increase revenues, but the top five most mentioned focus on some very specific niche markets: fabric and textile printing, retail and POP signage, packaging, Latex printing opportunities, and custom interior graphics.
It's not surprising given that these areas were reported by experts in the 2010 State of the Industry (Wide-Format Imaging October 2010) as being some of the markets with the potential for growth in the next 12 to 24 months.
Additionally, the top shops are fully aware of how converging marketing conditions and increased competition—trends that have only been increasing with time—make it even more essential now for PSPs to stand out from the crowd.
"As we continue to recover from the economic downturn, avoiding commoditization of the business, its products and services, will be imperative. Diversification and innovation in regards to the breadth of our offerings, with continued exploitation of our high-quality core capabilities, will be key to maintaining greater perceived value," said Jon Leasia, owner, EPS-Doublet.
"Our biggest concern is around the commoditization of this industry from several factors including off-shore print and imaging companies, commercial offset companies expanding into this arena to broaden their product offerings, and the general decline in pricing advantage that the wide-format industry as a whole used to maintain," said Sean Miller, owner, Digital Graphics Express. He also pointed to an up-and-coming technology—digital signage—as one of the biggest threats in the coming year. "The decreasing cost of entry to digital signage will play a factor in the retail market as well."
Express Graphics' owner, Mitchell Termotto, agreed. "Digital signs are our biggest challenge this year. Many companies are looking for options to quickly change graphics and implement new campaigns. And digital displays are becoming more and more cost effective and the software to run them is becoming more user friendly. This will create a big shift in our industry."
But even though digital signage may prove to be a threat to business, replacing static wide-format signage in some areas, it can also provide to be an opportunity for savvy PSPs.
"We’ve encountered many challenges and obstacles over the past couple of years. These challenges have driven us to think well outside the box of a traditional large format provider," said Gary Paulin, owner, Harmonic Media. "With the swift emergence of social media platforms and other new forms of direct social marketing, traditional ways of promotion and advertising via print and large-format graphics have definitely taken a hit. We’ve always marketed Harmonic Media as a full service visual media provider, but we also provide commercial print management services, interactive digital signage systems and custom fabrication and installation of a wide variety of displays. By leveraging long standing media partner relationships outside of our core offering, we’re able to deliver a much more holistic solution set and our clients have responded with big smiles and more committed business."
The changing market has forced PSPs to re-evaluate how they do business and how they present themselves to their customers—while remaining true to themselves and their mission.
"The last 18 months has been a strange combination of poor economic outlook, clients paralyzed into a wait and see posture, and competitors eroding the market by employing lowball pricing tactics as the only method to compete and survive," said Tim Fullmer, president/CEO, Vision International. "Our strategy for 2011 includes significant efforts in new product development, aggressive social media and internet marketing, and expanding our overall marketing tactics to create new inbound business opportunities. We are taking an otherwise static industry sales model and converting it to a proactive client outreach. "
