Day One: Charting Wide-Format Printing’s Course

The Big Picture has assembled five of the marketplace’s most informed analysts and consultants and asked them to help you evaluate the wide-format industry. Each day over the next two weeks, we’ll post a new, critical question from The Big Picture with invaluable answers from our panel – all designed to help you ensure that your company charts its best course for a prosperous year ahead.

Our 2011 panel participants include: Marco Boer, consulting partner, I.T. Strategies (www.it-strategies.com); Tim Greene, director, visual communication technologies consulting service, InfoTrends (www.infotrends.com); Dan Marx, vice president, markets & technologies, SGIA (www.sgia.org); Peter Mayhew, director, Lyra Research Europe (www.lyra.com); and Art Wynne, president, Business Equipment Research and Test Laboratories (BERTL, www.bertl.com).

BPIC: The economy continues to be sluggish and challenging for most print providers. But some shops have found interesting ways to prosper. What’s the rest of 2011 look like? And what about 2012?

Tim Greene, InfoTrends: The biggest challenge for all of us is the lack of any visibility into the market. We’ve recently been collecting print-buyer inputs on this, and what we’ve found is that most print buyers expect to spend the same amount over the next 12 months as they did over the last 12 months – which isn’t great news but at least it’s a stable environment. On the other hand, nearly 10 times as many people are telling us they expect their expenditures to grow vs. decline over the next 12 months compared to the last 12 months. So there’s reason for optimism. But the overall economic outlook is so uncertain that it’s very difficult to see any dynamic growth in the North American market right now.

Dan Marx, SGIA: We hear mixed reports from our members. Some report being “crazy busy,” while others complain of slow times. There certainly is work to be had out there, but success is not assured, especially for mid-size print shops that have to compete with larger companies. That said, our recent surveys have shown much more optimism than pessimism, and a hopeful outlook into 2012 and beyond.

Marco Boer, I.T. Strategies: In this sluggish economy, large accounts are questioning every dollar spent, putting business up for competitive bids, etc. In turn, this has driven profits out of the business for print providers, who are now challenged more than ever to have a broad base of customer accounts rather than the typical 20 percent of customers who account for 80 percent of business. To cater to a more fragmented customer base, the ability to create a broader range of large-format output has become more critical. Those print shops who have continued to expand their application reach, those who are printing on new and differentiated substrates – those shops are continuing to thrive. The challenge for shops, however, is finding ways to expand their offerings and reach a broader client base within their capital-spending and marketing budgets, which may be zero through the end of 2011. This requires resourcefulness on their part.

Peter Mayhew, Lyra: It’s becoming increasingly difficult to forecast too far out as short-term events are clouding longer-term prospects, and the next few months look like more of the same. The downturn in the economy has shown that proactive and innovative marketing by all businesses is an essential part of any business plan and, that’s good news for innovative print providers.

Art Wynne, BERTL: 2011 and 2012 will continue to be challenging for print providers as the economy continues to struggle and corporations are doing more with less. Companies that have diversified revenue streams, strong marketing initiatives, and excellent customer service will make out well in the years to come. Borrowing from the corporate playbook, print providers will need to do more with less and build up cash reserves to help them through the fluctuating economy.

Boer: How 2012 will develop is anyone’s guess, of course. At the moment, everyone is hoping there will be better financial conditions, but there’s little evidence one can take to the bank that it will be better given ongoing financial-market challenges. For those print shops that have right-sized their businesses and who are continuing to be resourceful, 2012 should be a relatively stable year. The good news for large-format print – unlike other print markets – is there has been little impact from electronic display alternatives. And there may not be for some time, given the capital-investment costs required to migrate to electronic-display alternatives. Some might argue that wide-format print is one of the few remaining profit areas left in the print industry.

Mayhew: The recession is also adding to the misery for the OEMs in our industry.

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Stay tuned for day two of Charting Wide Format's Course!