Positive Signs for POP, Retail

If you don’t think it pays to advertise and promote, think again. Despite continued high unemployment and uncertainty about job growth prospects in the US, the retail industry is projected to grow by 3.4 percent this year to over $2.5 trillion, according to the National Retail Federation (NRF). Fragile economy or not, Americans spare little expense when it comes to being festive. Collectively, we dropped $7 billion on Halloween last year and another $6 billion on Christmas decorations. Overall 2011 holiday sales beat expectations, rising four percent to nearly $472 billion.

If the first quarter is any indication, there will be no slowdown for the remainder of 2012. The average person celebrating Valentine’s Day, for example, spent some $125, up 8.5 percent over last year—and the highest in 10 years, NRF reported. (Total spending for hopeful romantics: nearly $18 billion.) And don’t forget Super Bowl XLVI: related spending averaged $63.87 per adult viewer, up from $59.33 in 2011. When tallied, money spent on parties and related merchandise reached $11 billion, said the Point of Purchase Association International (POPAI), the global association for marketing at retail.

Virtually anyone with a product to sell—retail stores, supermarkets, banks, car dealers, restaurants—can benefit from POS and POP displays. Myriad statistics reveal that more than 70 percent of decisions about whether to buy something are made at the point of purchase. According to one UC Berkley study, customers are six times more likely to buy a product if a POP display highlights it.

The print medium, including traditional cardboard signage, plays a leading role in these numbers. HP estimates the global sign and display industry to be a 6.2 billion-square-meter market, with retail/POP accounting for more than 60 percent of it—and growing about 15 percent per year. “Of that 3.8 billion square meters, only 15 percent is [printed] digital,” said Harel Ifhar, HP Scitex marketing director. “The potential for growth is huge.”

Printed POP Still Pops, Tops

Social media is all the rage these days. Online printer moo.com recently offered free business cards to attendees of the SXSW (South by Southwest) Interactive show in Austin, TX, where some 30,000 show-goers gathered last month. But social actually represents a relatively small sliver of the marketing spending pie. To be sure, there are technological threats from electronic signage (Burger King’s in-store menu boards are no longer printed) and digital, especially mobile. Last September, the In-Store Marketing Institute changed its name to the Path to Purchase Marketing Institute, reflecting the broadening of its member base beyond its original POP focus. It now includes search, social, mobile, direct, events, couponing, and other marketing-related companies, explained Peter Hoyt, executive director/CEO of the Skokie, IL-based organization, which also publishes Shopper Marketing magazine.

Nonetheless, POP advertising still is huge in print. The most basic POP display is a sign, but options range from mobiles, easel cards, and life-size stand-ups to movie displays, floor graphics, decals, banners, and everything in between. As 7-Eleven convenience stores nationwide add chicken empanadas, mini beef tacos, and beer-infused bratwursts to their menus this spring, traditional POP print signage will be a big part of the chain’s marketing efforts to spread the message to hungry snackers.

More popular than ever, customized POP are printed products that target consumer’s specific buying trends at the point of their purchase. To help determine what they should be printing, some customers are heeding the advice of Ivy League professors at the University of Pennsylvania Wharton School of Business, which published a research report, “From Point of Purchase to Path to Purchase: How Pre-shopping Factors Drive Unplanned Buying,” last year.

One growing POP trend is cut-out shapes and dimensional printing, said Mike Sherkey, business development director for Cushing, a wide-format printer in Chicago. “We’re getting more cutting requests,” Sherkey noted. The increasing demand made cutting by hand cost-prohibitive, so in February Cushing took delivery of a G3 L2500 cutter from Swiss manufacturer Zund.

Sherkey added that printing on thinner materials also is growing in popularity. Over the holidays, high-impact “.020-inch Styrene is used for POP on racks with Christmas tree clips, for example,” he said. Depending on the application, Cushing’s output comes from one of eight large-format printers it uses. With some 40 full-time employees, the 10,000-square-foot firm houses: two 60-inch Canon imagePROGRAF iPF 9100 12-color inkjets, two 60-inch HP Designjet 5500 models featuring outdoor UV ink, one 98-inch HP Designjet 10000 roll-to-roll banner printer, one 4x8-foot Océ Arizona 550 GT UV flatbed printer, one 42-inch Océ ColorWave 600 plotter (for inexpensive retail, Sherkey pointed out), and one 54-inch Roland DG CammJet for printing and cutting vinyls.

The PSP added a Canon imagePRESS 7010 late last year to increase capacity for small-format jobs such as brochures, mailers, booklets, counter card, and table tents. The upgrade joins an imagePRESS 7000 model installed two years ago. The firm also does a fair amount of package prototyping for corrugated, said Sherkey, “one offs” or low quantities of five or 10 pieces.

Acquiring Growth

Just last month, direct mail firm Specialty Print Communications (SPC) of Niles, IL, acquired a 49 percent interest in MOTR (Media on the Run) Graphics, a POP and large-format signage business to be housed within SPC’s 73,000-square-foot lettershop which opened three years ago in suburban Chicago. “It’s a good complement to their business,” said Delia Saboya, who is partnering with LeFebvre brothers Adam, Dustin, and Ryan on the venture. “POP ties in with the gift cards and mailings that SPC does. We can wrap the whole project, including signage in stores and [other] retail business,” explained Seboya, a 25-year industry veteran As of press time, MOTR had not decided what wide-format flatbed printer it would buy, but Saboya said they are taking a close look at EFI VUTEk, Fuji’s Inca, and HP/Scitex devices.

Describing SPC as a diverse printer is a bit of an understatement. The $90 million firm, which produced some 100 million pieces of direct mail over the 2011 holiday season, houses a Kodak Prosper S10 inkjet web imprinting press along with a Versamark CS410 and half- and full-web presses. In 2009, it acquired book printer Batson in Benton Harbor, MI. The G7-certified shop won a PIA Premier Print Benny award in 2011 for a dimensional B2B campaign produced for Sprint.

To add print capacity and expedite speed to market for short to medium production runs, last December KDM P.O.P. Solutions Group, Cincinnati, purchased American Digital Communications (ADC), a 40,000-square-foot facility in Norcross, GA. ADC specializes in digital printing, finishing, kit packing, and delivering customized POP materials to several retail industry segments, including quick-serve restaurants, convenience stores, and home-improvement retailers.

Three years ago, ADC added digital diecutting capabilities along with an EFI VUTEk QS2000, which is a six color plus white wide-format UV device printing on a variety of flexible and rigid paper as well as synthetic substrates. The VUTEk joined KDM’s 10 other large-format digital printers, which range in size from 54 to 146 inches.

Over the past few years, KDM has also increased its arnsel of hardware in the wide-format space, purchasing a HP Scitex FB7500 UV flatbed six-color press in October 2009 and a second FB7500 press a year later. In 2011, they also upgraded to the HP FB225 inks which adhere to a wider range of flexible and rigid sheets and are GREENGUARD Certified. With the addtion of their second FB7500, KDM also added capacity in its finishing department by bringin on a second MGE I-cut digital flatbed die cutter in November 2010. The firm also has 30 printing presses covering seven print methods, including presses, screen, large-format UV offset, large-format conventional offset, large-format digital, small-format digital, flexo, dye sublimation, and photographic imaging.

“The addition of ADC increases KDM’s print production and manufacturing capabilities, expands our geographical presence in the Southeast portion of the United States, and creates further opportunities to foster growth of product offerings to our customers,” said Bob Kissel, president/CEO of KDM P.O.P. Solutions.

Randy Ladwig, one of three ADC company founders, added, “We are pleased to be able to increase our capacity with additional presses as well as apply our expertise in the [quick-serve] industry from a regional to a national level.”

This past summer, Toronto’s TI Group decided to more aggressively pursue the POP market by installing a large-format Durst Rho 1000 printer at its SCL facility in Scarborough. “This total investment of $2 million ... solidifies our position as a market leader for POP solutions and positions our company for additional growth in the coming years,” said partner Domenic Rubino.

Peter Spring, TI Group’s sales VP, explained how the Rho 1000 fills a production gap within the firm’s large-format lithography capabilities, which produces up to 73-inch work on a six-color manroland press. (The firm also added a six-color, 40-inch Heidelberg Speedmaster CD 102-6+LX with UV capabilities and Prinect Image Control in late 2008.) The Rho 1000 is a continuous UV-based inkjet system, employing Durst’s Quadro Array printhead technology, with a maximum output of up to 200 4x8-foot boards per hour. “This press also adds significant capacity to our SCL facility, where we have, over the last two years, expanded our scope of services to offer product design, creative support, and kitting,” Spring added.

After all is spent, whether produced digitally, screened, or printed offset, POP advertising doesn’t cost—it pays. Wide-format printers of POP and retail signage can attest to that. Sherkey said Cushing tries to keep up with current trends, such as the increasing demand for more printing on fabrics, which his firm outsources now. “But we may need to adjust,” he noted.

Making the decision to invest in new equipment is not easy for small print firms like Cushing (annual sales are over $5 million), which is why it, along with some 300 peer companies, networks through the ReproMAX association. Before writing a check for the down payment on a large-format textile printer, Cushing management will consult with fellow members about similar equipment purchases. “There are email forums, information exchanges, and idea sharing,” Sherkey explained. “It’s invaluable to get input from other people before you make a bad decision.”

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