Key Takeaways from This Year's Wide-format Summit
Wide-format Summit 2022 has wrapped, and after three jam-packed days filled with keynote speakers, general sessions, intensive case studies, and plenty of networking in Palm Beach Gardens, Florida, it's now time to look back and reflect on some of the things we learned.
Attendee Voices: Motivations & Takeaways
Katie Drew, print production manager with LDI Solutions, came into the event expecting “a dry, sit-down meeting,” but says it didn’t end up that way. Drew says she was able to make key connections in numerous areas that will benefit the business. Particularly, Drew says, strategies in color management and the capabilities of cutting technologies will help LDI in both its upholstery printing and medical markets. “I’ve made good connections here," Drew says, “Including someone who also serves the medical segment. We found an opportunity for alignment.”
“We wanted a fresh sense of what’s happening in the industry,” said Craig Rogers, wide-format area leader at Vivid Impact, “We’re seeing a lot more automation, and a supply chain that’s not as ready and open as it used to be.” In particular, Rogers found the summit’s panel discussions insightful, noting they enabled him to “see my business in other people’s view – it connects us with them.” For Vivid Impact, Rogers is looking to add automation software with the hope of minimizing human touches. “It’s hard to find workers,” he says.
Scott Watson, president of JGX Group, said, “The [summit] experience has been great for me – I didn’t know what to expect.” Watson says his company, which primarily serves retail and event segments, was affected highly by COVID, and he has been working to retool it for a new future. This effort includes exploring automation software. Watson adds, “We need to shorten the time between taking the order and shipping.” Software also factors into the company’s new direction, he says, which includes a concerted approach to marketing, and branching into B2C approaches.
“We’re looking to learn how other companies are handling challenges – particularly in labor,” says Lucinda Zittrouer, director of wide-format of commercial printing company Kennickell Group. Kennickell says wide-format applications are growing within Kennickell Group, and now represent about 50% of total jobs, a majority of which is with existing customers. Like many other summit attendees, she is exploring automation, particularly through software solutions: “We’re looking at front-end automation, and less human touches.”
Answering the Burning Questions
One of the keynotes presented on Tuesday was "Five Burning Questions on Every Wide-format PSP's Mind," given by Marco Boer, conference chair and VP of IT Strategies. He noted that he's been talking to print service providers around the world, and there are five questions that really seem to be resonating, no matter the geographical location or type of print business they operate.
1. What does tomorrow's print technology look like?
"It used to be that everything coming out was better, faster, cheaper. But we're now at a stage almost 30 years into wide-format where if the output is 20% better, you aren't going to pay 20% more," Boer said. Today's upgrades are far more incremental than they were in the past, with many OEMs focusing on adding elements such as predictive analytics, where the presses will tell you when they need maintenance, or which parts aren't performing within accepted standards. They are also far more focused on adding automation features, removing human touchpoints so print shops can be more profitable and get higher margins for the same work.
2. What new ink chemistry will obsolete existing types?
There are really five types of ink in the wide-format world: aqueous, which is where the industry started, but today is only used in a small portion of work; eco solvent, which is the most used today; latex; dye sublimation; and UV curable. From a cost perspective, noted Boer, aqueous is actually the winner, since it is mostly water, with some additives. The problem is that it takes a long time to dry, and can't be used on all substrates since it's not "sticky" enough.
Eco solvent inks, on the other hand, dry much faster, and are far more productive than aqueous, making them a good choice for a wide range of applications, while still being cost effective. latex is very tacky and sticky, meaning it does well on a much wider range of substrates, and while it is complicated to make since it has no water at all, it is a great option. Dye sublimation is a much more aggressive ink, but while that means it dries faster than most, it can also be harder on nozzles, requiring more maintenance or more frequent replacements. And finally is UV, which dominate in some sectors because it dries instantly and can go directly to finishing.
"At the end of the day, the ink choice is really about the application," said Boer. "There is no good or bad to any of them - it really is all about the application."
3. How do we address decreasing profit margins?
One thing Boer stressed is that wide-format margins are considerably better than those in the commercial space, and that's something not everyone realized, "However, things aren't going to get better," he said, "they're just going to get tighter."
The decreasing margins will be driven by a number of factors, including more competition, as players from other print segments move into wide-format printing - many of whom don't understand the market and will misprice the value of wide-format work. "That's going to cause a problem, and that's not something you can protect against," said Boer.
One way printers can protect their margins, however, is through adding automation and making the process more efficient, allowing the shop to remove costs from the job without increasing prices. However, he stressed that automation isn't free. "It used to be that 3-5% of your annual revenue went to capital expenditures," he noted, "But today IT takes 3-6% alone. It is a business model change." Making the right strategic investments isn't something that can be pushed off, on the software or the hardware side of the equation.
4. How can we manage inconsistent substrate availability?
"You're going to have to print of whatever you can get at any given time," said Boer, "and that means colors are going to shift." In fact, color is one of the single biggest concerns when it comes to changing substrates, adding an extra element of complexity, since customers still expect the colors to match, even if the substrates have changed.
Shops, Boer stressed, are going to have to find ways to automate color, and be able to re-profile substrates and equipment on the fly. As a result, the choice of RIP becomes even more critical. Shops need to invest in a RIP that can handle the entire workflow, and that can tie in to every production machine on the floor, if they want to stay ahead of this particular challenge.
5. When will substrate pricing stabilize?
Unfortunately, said Boer, it's not going to any time soon. Paper suppliers are having their own supply chain challenges, and many mills either have or plan to convert from producing commercial and printing papers to those used in packaging, further squeezing the available supply. Add to that the industry has traditionally relied on imports of paper from around the world, but the combination of lockdowns in Asia and unrest in Europe have made those papers more expensive, and that's when they can even be acquired at all.
Boer urged printers to see this as an opportunity, however. The things that will be printed in the future will be things that customers will truly value, and if they have specific substrate requirements, sometimes that means making them aware that the price will reflect that.
The bottom line, said Boer, is that the wide-format industry is actually in a pretty good place, with the technology more solid and reliable than ever before. However, business models are changing alongside customer needs, and that is going to require shops to rethink their strategies going forward. Boer strongly suggested every shop should formalize their capital investment budget and strategy to gain the best position themselves for the future.
"And even if you already have a budget, formalize it even more, especially when it comes to what you need to spend on new and improved software. The more data you have, and the more information you have on which customers are profitable and which are not, the better off you'll be. Ten years ago you didn't need that, he said, but now you need to have actual data, and investment is going to become more important."
All About Automation
Also on Tuesday, Denise Gustavson, editor-in-chief of Wide-format Impressions magazine, led a panel discussion titled "The Automation Audit: How to Identify and Streamline Your Operation's Weakest Points." Joining her were Trai Majors, VP of operations Firehouse Image Center; Alan Stratton, color team manager, The Bernard Group; Bjorn Bedore, graphics technical advisor Olympus Group; and Jason Hamilton, chief innovation officer, Innovative Displays.
The panel discussed the ins and outs of automation, and a few tips emerged that other wide-format printers considering more automation in their operations can learn from.
- Look at everything, and see where the bottlenecks are. Those are the areas to focus on first when it comes to automation. You don't have to go from zero to sixty all at once - start with automating specific areas of the business and then expand from there.
- While having automation features on a press is great, the real major impacts to the business will come from the front-end and eliminating touch points as the file moves through the business, from estimating all the way until it gets to the press itself.
- Top-down is key - management has to be completely on board with the changes to the processes that automation brings, and it's up to them to ensure staff understand not just how to use the systems, but why the shop is automating in the first place.
- Speaking of staff, there will naturally be some fear that automation will push employees out of their jobs. The best way to get them past that is to get them involved, find out what parts of their jobs aren't working or could be improved on, and focus on automating those areas. No one likes to do the repetitive, mindless tasks - automation can actually help staff focus more time and energy on the things they enjoy doing.
- Not everything can be automated internally - at some point you will hit a wall. This is when having the right partners becomes crucial to the success not just of the new processes but to the long-term profitability of the business.
- Don't focus on the up-front costs of implementing automation throughout the business - that is deceptive. Instead, focus on the long-term gains in things such as productivity and efficiency, and what that will ultimately bring to the business. The ROI isn't going to be an instant return, but it will be one that compounds the longer the new systems are in place.
- Go into automation with an open mind - the places your shop might benefit the most might not be the ones you think they are at first. Take the time to really understand how jobs are moving through your shop.
Who Buys Wide-format
On Wednesday, Lisa Cross, principal analyst for PRINTING United Alliance Research, held an information-rich session taking a closer look at who is buying wide-format printing, the trends impacting them, and ultimately what they are looking for when they seek out print providers.
She stressed that for buyers, signage is a "high value application" that brings a lot of benefits to brands trying to reach consumers. This is especially true as the world begins to return to in-person events, as the demand for retail and experiential marketing begins to rise once more.
That trend is seen in the data, with Cross noting that 91% of print providers expect to see growth in sign and display graphics in the next year, with 51% expecting growth to be in the double digits. This means that there is a lot of opportunity out there for wide-format printers willing to go look for it.
But knowing who the customer is can make or break winning that job. The vast majority of today's print buyers identify themselves as marketing executives (27%), CEO/President/Owner (27%) or Marketing Manager (24%). Fortunately, 76% of print buyers said they don't maintain a preferred vendor list shops must clear before even getting a chance to bid on jobs. For the 24% who do use that practice, it is the purchasing department that handles who is - and isn't - an option.
Many buyers, Cross noted, are moving toward buying their sign and graphics online, which makes having an up-to-date and attractive web presence more critical than ever before. In fact, after referrals, internet searches are the top way most buyers are finding new providers to work with. Other ways they are identifying new providers include direct mail from the providers' advertising services, social media, and online ads, just to name a few.
Standing out in that environment can be difficult. Consider sending samples and promos that really highlight the quality of work your shop can produce - and don't be afraid to customize it with the target customer's logo and branding. Give them a tangible example of how your shop can help them with their unique challenges, rather than rely on generic pitches. It is also useful, said Cross, to provide tools that help print buyers better understand wide-format and print in general, as well as a blog that establishes your shop as a thought leader they can turn to for answers.
So what elements are most important to today's print buyers? There are a few:
- Quality of the work
- Easy to work with
- Excellent customer service
- Responsive service
- Fast turnaround times
Take note that price is number five on that list. "Price is always a factor," said Cross, "but it's not the most important factor." Print buyers today value a great experience when it comes to working with your shop, so take a step back and look at every point of contact from beginning to end, and see where you might be able to improve if you want to attract more buyers.
A Glimpse into the Future
The last keynote session of Wide-format Summit 2022 was given by Gustavson and Andy Paparozzi, Chief Economist, PRINTING United Alliance.
Paparozzi took the stage first, opening with "All signs are that we're headed for some difficult times." Disruptions to business caused by everything from the pandemic to the supply chain are only going to continue, he noted, while resistance to price increases will continue. "The American economy will be slowing down, most likely right into a recession," he said.
On the surface, he noted, things look good, with most shops reporting growth - sometimes in the double digits - for their sales in the next 12 months. But digging deeper, he noted, you find that operating costs are expected to rise 8.1% on average in the same time frame, and almost half of printers are reporting that they expect costs to rise just as fast as sales. So, profitability and the bottom line not only won't see a benefit from the rising sales, but might actually start to fall.
The harsh reality, he said, is that unprecedented uncertainty itself is the biggest challenge right now. Shops can't predict demand, costs, or even substrate availability, and the wrong move could make things worse, not better.
"So what are we going to do about it," Paparozzi asked. By far, the number one thing is to increase productivity. That can be accomplished by increasing automation throughout every facet of the business, by investing in capital equipment that is faster and more efficient, by streamlining workflows, by a better use of the MIS system, by a better use of data in general, and even by using principals such as lean manufacturing to improve the way work flows through the facility.
Paparozzi stressed that while the outlook for the economy is weakening every day, shops can prepare for it. First, he said, don't assume that because you've survived past recessions that you'll make it through this one - every recession is different. Second, don't assume you can cut some costs and then sit back and wait the rest out - that's not going to work. Finally, use any one of a number of intensive tools to help you evaluate new opportunities for your business, since that is the way shops will not just make it through the troubled days ahead, but will come out stronger for it.
"All of the indicators suggest we're heading for some tough times, but that's okay because we know what to do," Paparozzi said. "We can turn those difficult business conditions in our favor, and make them the competition's problem. We can peruse opportunities while the competition is retrenching."
As for what those opportunities are, Gustavson took the stage to take a closer look at some of the trends driving the marketplace, and how printers can turn them into new market segments. "There are a lot of things you might be doing right now," she said, "but there are a lot that are adjacent to what you're doing right now." And those are the markets where shops should be looking for opportunity.
One trend she noted is privacy concerns - 74% of people are concerned about data privacy and the use of their personal information for ad targeting. Both Apple and Google, she said, have responded by releasing new tools and settings in their mobile operating platforms making data tracking and sharing opt-in, rather than opt-out. That, in turn, is cutting brands off from a valuable source of information that has helped them target consumers in recent years.
This trend means that out-of-home (OOH) advertising is seeing a surge in popularity. You can skip an online ad or ignore digital marketing, but you can't turn off a billboard, Gustavson noted. You can't ignore a weird-colored car with an eye-catching wrap driving by. These are opportunities for wide-format printers to connect with brands and find new and innovative ways to capture the attention of consumers without the use of tracking data.
Another big trend she highlighted is the pent up demand for travel. Even despite a lingering fear of COVID - 62% of consumers can't shake the fears they have carried for the past several years, and 39% are afraid of dying from the latest strains - people are still getting out of their homes again. "We've all seen the headlines - people are eager to get out of the house," she noted.
In fact, in a survey, 33% of people expect to attend an in-person event this year, and 88% expect to have in-person meetings of some kind. People are also shopping again - while they might be discerning when it comes to where they are spending their money as a recession looms, they are still looking to go to retail stores again. Add to that an increasing return to the office, which means more commuters on roads and public transportation, and you have a wide range of opportunities for wide-format printers to step in and help brands stand out.
At the end of the day, she noted, 80% of printers are looking to move into a market segment not their own - and most are looking at wide-format as a prime vertical to explore. To defend ourselves from the onslaught, she noted, wide-format printers need to be look at other things they can offer to converge in the other direction. Can you capture more market share from your customers by offering things like direct mail or marketing materials before the commercial printer currently producing those items starts offering the signage as well and takes the business? These are the types of things wide-format printers need to be considering if they want to survive the turbulent waters ahead.
The event concluded with the recognition of a few companies and individuals. For the best case studies, as voted on by attendees, EFI, HP, and Lindenmeyr Monroe were the top three winners. CloudLab was voted "Company to Watch" as well, with its products sparking a great deal of interest. Finally, for the most engaged and contributing attendee, Dean Bott, president of Thysse, was recognized for his insightful questions during the keynote and general sessions that often sparked longer conversations.
And those are just a few of the things attendees to this year's event experienced. If you want to join us next year, be sure to visit wideformatsummit.com to find out more. And until then, make sure to join us in Las Vegas Oct. 19-21 for PRINTING United Expo. We'll be looking forward to seeing you there!