The Survey Says...Next 'Big Things' in 2014
At the end of every year, industry pundits and prognosticators attempt to predict the next "big thing" in the printing industry and where firms will invest. Instead of making guesses on where the industry is headed in 2014, Printing Impressions and InfoTrends surveyed print service providers (PSPs) to find out what firms plan to invest in and the rationale behind investment plans.
The survey is part of an ongoing partnership between InfoTrends and North American Publishing Co. (the publisher of Printing Impressions) to monitor emerging market trends. The latest survey, conducted last September, focused on finding out the key equipment, services and software investments on the agenda for the coming year.
Respondents' investment plans for 2014 center mostly on supporting print, however the addition of marketing services, digital media products, and industrial printing applications are also on the agenda, albeit on a smaller scale. Print service providers are also expecting 2014 to be a year of double-digit revenue growth, as the 97 decision-makers responding to the survey anticipate revenues to increase, on average, 10 percent compared to 2013. That's up from the 4.2 percent revenue growth reported last year.
Print service providers plan to power growth on many fronts (see Figure 1), including strengthening print through adding ancillary support services (i.e., fulfillment, Web-to-print, personalized print, mailing, marketing, data and content development) and emerging technologies to make print interactive, such as mobile codes, augmented reality and near field communication.
At first glance, respondents' plans for 2014 look like firms are sticking with the status quo and expanding more in service areas that aren't new. That's partly true. The other half of the story is those companies that are expanding by adding marketing-type services and pursuing methods for making print interactive. Those firms are evolving services to differentiate from the competition, move up the customer value chain, grow business and respond to new customer demands.
When asked to identify the specific reasons for new service investments, those services dominating business growth leaned more to nontraditional services (see Figure 2). Respondents identified content development, data services and digital media applications as key services for growing business. Emerging technologies that make print interactive, such as mobile codes, augmented reality, and near field communication, are also viewed as services for growing business—signaling the industry's move to bolster print's role in a new media world.
Print service providers also designated Web-to-print and personalized print services as key growth services. While these services aren't new, customer demand for them is picking up. Web-to-print is a key means to address marketers' increased demand for improving marketing supply chain management—the chain of suppliers that an organization relies on to produce marketing materials. Web-to-print systems provide marketers with an agile and scalable communication ordering process to reduce costs from over-ordering of materials, better control branding and provide real-time visibility into print costs.
The ability to personalize a document is a key aspect of making its content relevant. Personalizing printed documents to recipients isn't new, but marketers' focus on personalized communication has moved to the mainstream as they explore options to enhance communication relevance.
Respondents identified wide-format graphics, high-speed inkjet, point-of-purchase displays, labels, textile printing and packaging applications as top digital printing services marked for expansion (see Figure 3). Emerging digital print applications, such as 3D printing and industrial print applications (i.e., printing on textiles, ceramics and laminate materials) will gain a toehold in 2014, as firms embrace new applications, according to respondents. Functional printing applications, such as pad printing and membrane switches, are beginning to surface, as companies look for innovative ways to expand printing services. 3D and industrial printing applications offer establishments the ability to take advantage of an emerging opportunity without pushing them too far outside their comfort zone.
Backing Plans with Investment
When asked what specific actions firms will take in 2014, more than half reported plans to invest in hardware (58 percent) and software (52 percent). The overall sentiment for adding or expanding services was to build them internally, as only 19 percent planned to partner with another company to add services and 14 percent planned to acquire another company.
The top investment category for respondents was hardware. Investments in finishing and digital printing technology are the top investment areas identified by respondents (see Figure 4). The continued competition from online channels has many businesses seeking to leverage and enhance printing's tactile advantage through innovative finishing techniques. Digital color and wide-format printing also are top investment categories as they serve increasing customer demands for short-run, on-demand production and personalization. More than 50 percent of respondents reported that business growth is driving investment in digital printing devices. High-speed inkjet is also on the 2014 PSP investment agenda; about half of respondents either plan to or are considering investing in it. More than a third of PSPs are considering or planning to purchase a high-speed color inkjet device to grow business or expand offerings.
Software investment plans focused primarily on print production workflows. Creative, workflow, Web-to-print, MIS and VDP software were the top software types budgeted for this year. Color management software is the top software investment that PSPs are considering.
As business plans for 2014 are put into action, the key challenge for print service providers will be to find the right combination of "new" and traditional services to better serve customers and grow business. Printing companies need to take action to find that balance and pursue new growth opportunities. 2014 promises to be a year of innovation in core, ancillary and new services, as providers look to harvest and profit from the "next big thing." PI
About the Author
Lisa Cross serves as an associate director at InfoTrends.
Lisa Cross is the principal analyst of NAPCO Research (a unit of NAPCO Media) where she conducts market research and analysis on emerging trends and changing dynamics in the commercial, in-plant and packaging industries, and the market forces that are driving those changes. With decades of experience covering the graphic arts and marketing industries, Cross has authored thousands of articles on a variety of topics, including technology trends, business strategy, sales, marketing and legislation.