While InfoTrends is projecting the wide-format digital graphics business to grow at about a seven percent CAGR through 2016, not all of the shops in the market are positioned to participate in that growing market. Instead InfoTrends sees a few different strategies that wide-format print service providers can follow to drive growth in their individual printing businesses. Three primary strategies have emerged that all still center around digital printing technologies; specialization, generalization, or diversification.
A specialization strategy could drive wide-format PSPs to invest their time and resources into particular segments of the wide-format market such as understanding all elements of retail operations which may give them an advantage over the competition when it comes to selling print services to retailers. Specializing in certain types of wide-format print is a great strategy because it means getting closer to customers in those niches and being involved in some of their decision making, allowing for some of that much sought after consultative selling which generally means higher-margin production activities. There are many pieces of wide-format production equipment that can help meet the needs of specialists depending on the area of specialty. The critical element of the specialization strategy is obviously to develop or acquire the skills and knowledge required to be successful through specialization.
Generalizing is also a fine strategy that requires a company to perform at a very high level operationally to satisfy buyer demands. Today’s wide-format print buyer is highly demanding, not only on price but also on quality and service levels. For generalists it is very important to not only be able to cover a lot of ground on the production floor—meaning they have to be flexible enough to produce a very wide range of applications—they have to cover a lot of ground at the sales level because they are competing, not only with all of the other generalists but also with all of the specialists. One of the strengths of being a generalist is that from a technology standpoint the market is coming to you. Wide-format digital printing equipment tends to get built generation over generation in order to provide the ability to produce an ever-wider range of applications. We think this is why there is such strong interest in wide-format UV-curable inkjet and wide-format Latex inkjet, more and more it seems these technologies are being designed to provide the ability to print a very wide range of applications. By 2015, InfoTrends expects the worldwide population of UV-curable inkjet and Latex printers to surpass 60,000 units. Many of those units will displace wide-format printer technologies such as eco-solvent and dye-sublimation, which are not as capable at printing the wide variety of applications.
A third strategy, and one close to generalization from a technology standpoint, is one of the big trends among wide-format print service providers that we see: business diversification. InfoTrends sees companies in the signage and graphics market moving into the area of specialty printing seeking revenue growth and higher margins than the signage and graphics market can provide. In one of our recent surveys, over 60 percent of the wide-format print shops surveyed reported that they are looking for opportunities to diversify. Some of this diversification is merely the expansion of the wide-format applications they produce, but some of it is to expand beyond conventional wide-format graphics applications into adjacent markets.