There sure are a lot of mixed signals about the global economy out there. While there is a lot of negativity in the general market in terms of employment and GDP growth, as it relates to the signage and graphics market a lot of the data and feedback we get from the stakeholders in the market is strong.
An example of this is that in June 2011 InfoTrends executed a wide-format print buyer study in North America to look at trends in demand for wide-format signage and graphics. This kind of input helps us understand some of the challenges that print service providers are faced with in the wide-format digital graphics market. This study was an update from a previous InfoTrends study, so there is something of a comparison available. The results of this study help us validate some of our assumptions as they relate to the technologies print service providers can be expected to invest in to meet the needs of wide-format print buyers. There are a few key findings described below.
Let’s start with some good news: Almost four times as many wide-format print buyers reported that they expect to spend more over the next 12 months than they did over the last 12 months. This is good news, and the even better news is that all types of companies are anticipating the growth. Larger companies, those with 100 or more employees, are actually reporting the biggest increase in spending expenditures. Presumably those larger companies spend more on wide-format graphics, and so it is expected that volume growth will be led by these larger companies.
Of the companies that suggested they expect to spend more, the average growth was 17 percent. That is 17 percent growth in the overall—not bad!
If you want to get in on that growth you have got to be properly positioned, meaning print buyers have to think of you as capable of providing the goods and services they need, when they need them, at the price they are willing to pay.
Quality vs. Price
The wide-format print buyer survey asked a question about why buyers select the sources they select. I think the comparison between the 2009 and 2011 studies is a set of results that a lot of print service providers are going to love.
When we did this survey back in 2009 “best price” was the top selection criteria, but in our most recent survey “best quality” was the top response. Now, this could reflect a different set of survey respondents, and that probably does play a part in the change over time. But it is good sign that the buyers are placing a greater priority on quality than on price, even though price remains one of the top considerations.
What is somewhat disappointing is that some of the other “service” type of factors such as presenting a knowledgeable staff, having a convenient store location, having expert design help, or having good, efficient customer services actually seem to be losing ground compared to 2009.
I think it is not right, of course, to suggest that these are not important, just that the other factors pretty much eliminate PSPs from consideration. If they don’t perceive you as able to produce the high volume jobs, they don’t offer you the job. If they perceive you as a high-cost provider, then there are certain jobs for which they won’t even involve you in the bidding.
Short Turnarounds and Sustanability
Another research result points to the requirement from the buyer side for fast turnaround. We’ve heard anecdotally many times that “buyers take forever to make some of these purchasing decisions” then expect the print provider to turn these jobs around quickly.
When we asked the print buyers what their most common turnaround time request was, 70 percent of them reported that when they order wide-format graphics they need to get them on a very fast basis; within two days of being ordered. That’s 70 percent of orders need to be fulfilled within two days of being ordered!
Obviously, this has a tremendous effect on the market as a whole because, just as print buyers don’t want to buy tons of wide-format graphics and warehouse them, PSPs don’t want to buy tons of ink and media inventory until they know they need it.
What all of this means is that the supply chain has been tightened so that everyone from equipment manufacturers, and dealers to PSPs and buyers are all reacting to daily business activities on a on a much shorter basis.
Finally, wide-format graphics print buyers are reporting a preference for green wide-format prints. I’m not exactly sure what that term always means, but the perception is of wide-format prints that are made with VOC-free inks or made on more easily recyclable materials.
Positive Trends = Growth Potential
So what does all of this mean? The way I read it, print buyers are asking for high quality, low prices, fast turnaround with strong eco-friendly properties. Good, fast, cheap, and “green”—that’s no small feat.
From my desk, what these buyer demands mean is that we can project stronger futures for technologies that bring these aspects to the table. This is why we are projecting about a 20 percent growth rate in wide-format UV-curable inkjet. The printers are fast and can be worked with right away, while the image quality is strong and seemingly improving all the time. Also the advances we have seen in UV-curable inkjet are delivering a lot of these advantages.
Most recently, the movement is toward LED curing, which provides even more improved performance through lower operating power consumption (and therefore lower operating cost) and the ability to work with a wider range of substrates. Some of the first production speed, LED curing wide-format printing engines have been introduced here in 2011.
From a graphics perspective, we think that durable aqueous will continue to grow as more vendors offer ink sets that provide very high quality while also offering lower prices and enhanced environmental properties.
Finally, the reformulation of some of the eco-solvent ink sets is also providing the value of high-quality printing, low operating costs, and durable graphics printing. The latest formulations of eco-solvent ink have better environmental properties with reduced hazardous air pollutants and reduced odor.
The last piece of good news from the 2011 wide-format print buyer study is that these buyers strongly endorse wide-format graphics as an effective way to communicate their advertising or informational messages. That is, they plan to buy wide-format graphics because it is a cost effective way to communicate advertising or their informational messages.