2012 Sign Franchise Review Commentary
Sign franchise leaders share their thoughts on the market, technological advances, opportunities for growth, and what needs to be done to keep the industry healthy.
Additionally, the advent of environmentally friendly latex ink printing technology makes it possible to produce effective indoor and outdoor signs and graphics products with little or no pollution using materials that can be recycled.
4. What market segments / niches / technologies do you think will have the biggest growth in 2012?
Monson: Digital signage is one of the biggest growth opportunities as our customers look for new, innovative solutions to more effectively communicate with their customers and prospects. Having a wide range of digital solutions is required to cover the broad base of customer needs from simpler "plug and play" to fully interactive digital signage. We also see opportunities in textile printing as customers move away from petroleum based products (vinyl) to a greener and lighter-weight materials; the savvy sign and graphics provider will offer these solutions to customers proactively. A third area of growth is in the area of direct to rigid substrate printing with contour cutting and finishing for the point of sale market segment. We continue to see opportunity in point-of-sale materials, event marketing, and fleet graphics. Through effective outside sales efforts, these areas will deliver the most significant growth.
Palmer: Flatbeds, routers and cutters have really made an impact within our system and our Franchisees continue to invest in these technologies to expand their product mix and increase efficiencies.
White: We see growth opportunities in many areas but are especially excited about the increase we see in the areas of point-of-purchase (POP) and building graphics.
With regard to (POP), we know that good graphics at the in retail businesses make a tremendous impact on product sales. The marketing spend for the graphics we produce is a bargain when compared to the cost of advertising. As the pressure to produce higher sales with fewer dollars increases marketers are quickly becoming aware of this.
As far as graphics for buildings, we see the need for good wayfinding systems increasing every day. Those who operate facilities required to comply with the Americans With Disabilities Act (ADA) are forced to move in this direction, but we also see a wide variety of other facilities embracing them as a better, more efficient way of directing people to where they need to be.
5. What are the primary business concerns for franchises in the sign & graphics market?
Monson: We believe the concerns are the same for both franchise and independent sign and graphics business owners. Consistent, profitable sales growth is the primary concern. At FASTSIGNS, we have been experiencing double digit growth for 8 months, but with uncertainty in the economy—especially with the election just around the corner—there is concern whether this double-digit growth will continue. Rising substrate and other costs and continued pricing pressure puts pressure on margins. Other related industries continue to add signage to their offering to broaden their product and services. Some products, such as banners, can become commoditized. The traditional suppliers in the sign and graphics market need to promote the value of design and solution-based offerings. We believe that FASTSIGNS has been successful in building solution-based selling processes that incorporate a wide range of products and services that add value to the customer, helping ameliorate margin pressures.
Palmer: The continued recovery and growth of the economy will remain a concern for the signs and graphics market. Until the credit markets stabilize, Franchises and Franchisees will continue to face the challenges of securing capital for future expansion.
White: Our number one priority is to provide great value to our customers. We believe we need to stay close to them and work hard to understand their needs. We are working diligently to help our franchise members determine the needs of their customers before the customers themselves do. By recognizing what clients really need, our franchise members can recommend innovative, cost effective solutions that help them achieve their goals.
