Specialize, Generalize or Diversify?

The novelty items and promotional products market is interesting based on its sheer size alone. At $18.5 billion in the US, according to the Advertising Specialties Institute (ASI), that’s about $5 billion bigger than the wide-format digital graphics market in 2011. Smaller sign shops and start-up companies are entering the market for specialty printing services based on their access to devices such as the Roland LEF-12 and the Mimaki 3042 just to name a few. These systems are based on some of the same printing technologies that enable the signage and graphics market, but are configured to produce other applications such as novelty and promotional items. This includes items such as pens, mobile phone cases, jump drives, and other items that will lay relatively flat. The promotional products market is also poised to grow over the next few years and, like the wide-format digital print market, can be entered without an enormous capital expenditure to get started. The Roland and Mimaki devices identified cost around $30,000, but there are water-based and solvent-based solutions that cost even less. InfoTrends is forecasting a growth rate of 14.5 percent for this class of small digital flatbed printers.

The other interesting finding from that diversification chart shows that there is a lot of interest in textile-oriented markets in the interior décor segment, in the soft signage market, and in the garment printing business. The décor market is particularly interesting once again based solely on its size, valued at over $250 billion in the US alone. It is no wonder that many wide-format print service providers are investing in technologies that enable them to offer products and services to this huge market sector.

Summary

Part of the interest in finding new markets is driven by what has been and continues to happen in the wide-format digital graphics market, with big print service providers investing in very high capacity wide-format digital printing equipment, then lowering prices to drive volume through that equipment. Wide-format print buying customers place such a high value of price and the ability to meet short turnaround times that these high-capacity suppliers have some advantages over smaller wide-format shops that have been serving the wide-format market for many years. Smaller wide-format print shops are evolving in three ways in order to continue to survive and grow, and often in more than one of these ways. Finding niches where high-capacity suppliers are unlikely to compete is one of the best ways for small shops to prosper and avoid some of the commoditization that is happening in the wide format graphics business.