The second biggest challenge that PSPs indicated was the overcapacity in the marketplace—with too many printing companies chasing too little business. Again there are strategies for dealing with this trend. We’re seeing a lot of wide-format PSPs evolve their business by investing in new products that get them into small but profitable niches. We think this is why products like the HP Latex printer, the Mimaki 3042, and the Roland LEF printers are having a lot of success right now, because companies in the conventional signage and graphics business are looking for something new they can do that is adjacent to the signage and graphics business such as package prototyping, indoor décor, textile printing, and the printing of novelty items from mobile phone cases to pens and golf balls.
The third major concern companies expressed was the buyers that shop exclusively on price. Honestly, I think everyone in every business suffers from this, but in the signage and graphics market the sheer number of sources of printing services and the transparent pricing that is available from some on-line suppliers makes this a particular challenge. We have found that there are print buyers that are required by their internal policy to obtain several price quotes whenever they buy signage and graphics. Indeed the print buyer research we have done indicated that price consideration ranked as either the number one or number two reason a print buyer selects a print source. The cliché here is to recommend a relationship selling approach—which in many cases is appropriate. A more cavalier approach would be to adopt the “fire your customer” approach made famous by those who would say to focus only on customers that are profitable. Yet another approach is to take a more manufacturing oriented approach to the signage and graphics business and set some defined limits on what you will produce and stick to them. So, for example, you offer products in sizes and on substrates that allow you to be much more efficient than service providers that treat every order as a custom job.
Compared to the top three issues, concerns about regulatory issues that might impact either the production of or the display of signage and graphics are relatively low. This is an area that industry resources such as Wide-Format Imaging, of course, but also trade associations such as ISA and SGIA do a really good job of keeping membership and readership informed, but it is a consideration that is very local. Still, if we step back and combine these responses, almost 10 percent of the market consider regulatory issues the biggest challenge to the signage and graphics market. (See Figure 3 above.)
There is no doubt that the signage and graphics market continues to evolve and grow. Signage and graphics providers have substantial challenges that require them to be steadily agile, aggressive, and opportunistic, but also strategic and data-driven. InfoTrends is working on some ways that PSPs can measure their performance versus their peers in some key performance indicators. In my next article in June I will get into the results of that research.