Wide-Format Printing Opportunities Continue to Expand for Commercial Printers
While Idealliance’s senior VP and chief economist Andrew Paparozzi says the market is poised for growth in 2017, commercial printers need to be smart, savvy and strategic when looking to expand their service offerings. The landscape of the printing industry has changed. It’s no longer segmented. Signage is no longer the purview only of sign shops any more than direct marketing programs are only for commercial printers. Differentiation is key to growth.
“The commercial printing market has become very competitive with pricing, and margins are on the decline. Commercial printers are looking for ways to expand their business and improve both their top and bottom lines in the process,” says Tom Wittenberg, marketing manager, the Americas - Sign & Display, Graphic Solutions Business, HP Inc. “Wide-format printing is a prime opportunity to do exactly that.”
But what makes digital wide-format inkjet printing such a lucrative opportunity? The numbers don’t lie. According to industry reports, while the growth rates within the wide-format market vary widely, the market, on average, is growing at approximately 10% to 12%.
“Wide-format continues to be a profitable segment with margins that are typically unheard of in the commercial printing space,” comments Randy Paar, manager, marketing - Display Graphics, Large Format Solutions (LFS), at Canon Solutions America. “Adding wide-format to their current offerings allows commercial printers to quickly and easily leverage their existing customer base and fulfill existing outsourced volumes for cost savings and improvement in turnaround times,” he notes.
“Many commercials printers have enjoyed the steady growth rate [the wide-format industry] garners as opposed to what has been a fairly flat offset printing [market],” comments Heather Roden, product marketing manager, Acuity Series, Fujifilm North America, Graphic Systems Div. Roden adds that commercial printers find the transition fairly easy as they are able to supplement or up-sell the offerings they have to their existing customer bases.
“We have found that, in most cases, current customers of commercial printers are also buying wide-format printing along with offset,” agrees Christopher Guyett, sales and marketing coordinator, Large Format & Label Printing Business, at Durst Image Technology U.S. “Wide-format printing allows commercial printers to capture this business with their current clients without having to hire a new sales force to gain this additional revenue. This business is smaller, generally lower in revenue, but higher in profit than offset printing.
According to Guyett, many times these jobs are add-ons to larger offset projects; because of this they are less subject to bidding and multiple quotes. This capability also makes commercial printers more valuable to their clients, he adds.
As technology becomes more accessible, many PSPs have expanded their offerings to include services that would otherwise traditionally be outsourced, says Michael Maxwell, senior manager, Sign Graphics Business Development & Marketing, Mimaki USA. “Commercial printers seem to be experiencing this trend more quickly due to the advances not only in engineering and chemistry, but also the ability of more media to support inkjet printing methods. Image quality, media compatibility and ink chemistry combinations have improved color gamut and repeatability, enabling digital printers to offer digitally-produced, short-run items such as business cards, point-of-purchase/point-of-sale (POP/POS) or posters at competitive prices.
“The ability to turn these short-run jobs out — along with other offerings such as vehicle graphics, exterior signage or decals with the same look and feel — has increased their popularity amongst digital PSPs and their customers.”
For those shops still on the proverbial fence about investing in an entirely new business — along with new competitors and processes — there are ways to ease into the wide-format printing market. POP/POS has proven to be one of the best application sets for commercial printers. This includes posters, banners, backlit signage, window graphics, as well as wall and floor graphics.
Banners, simple signage and decals/stickers are an easy way to start a wide-format print business, points out Michelle Johnson, advertising/events manager at Mutoh America. “All three are pretty simple RIP and print setups, and require minimal manual work.”
While banners and posters are some of the easiest and most common applications to produce, they are also, as a result, the most commoditized. “They can represent an easy learning curve to get started, but should not be the long-term focus if a [commerial printer] is trying to quickly increase revenues,” advises Paar.
Mimaki’s Maxwell agrees. “Most commercial printers start off with banners and decals as a service, and then graduate into vehicle graphics and exterior signage as they become more comfortable with digital technology,” he says. “Commercial printers that are aligned with packaging companies can also start taking on package prototyping, using a combination of digital printers and flatbed cutters. In addition, some commercial printers have started offering soft signage as an entry into the digital space.”
Once commercial printers have some experience under their belt managing wide-format projects, expanding into higher-profit applications is a natural next step. These applications, however, are much more complex and involve a much higher skill level than simply producing banners or posters.
Textiles: According to industry reports, both permanent and temporary textiles for the signage, trade show and interior décor markets, is growing at a 25% to 50% rate, depending on the specific market and specialty. “In certain markets, such as window blinds, early adopters are reaping the benefits of limited digital supply,” comments HP’s Wittenberg.
According to Mutoh’s Johnson, “Dye-sublimation and textile printing is becoming a bigger market that’s less and less intimidating to get into.”
Textile/dye sublimation printing has been expanding for many years in Europe and is now starting to take hold here in the U.S., agrees Durst’s Guyett. “Retailers and exhibitors seem to like the look and feel of fabric, from previous POP print output. This benefit is compounded by the ability to fold and ship at a low cost, along with the easy installation/de-installation of the print.”
Interior Décor: This is a relatively new market that is growing at a reported 25%+ rate in North America. With only a handful of digital printing companies involved, shops have the ability to reap high margins.
“I expect interior décor applications to continue to grow. One example is digitally printed wallpaper, which has been an application showing increased growth in the past couple years,” says Canon Solutions America’s Paar.
For décor, these are newer applications to inkjet printing technology and the margins for printers are much better — for now. “The end user customers see these as longer-term and high-value projects and are willing to pay a premium for these applications,” notes Larry Salomon, VP, Wide-Format, at Agfa Graphics.
Packaging: There has been a tremendous growth opportunity and focus on packaging applications — both in single- and multiple-pass printing. For example, with label printing applications there are a variety of inkjet alternatives available. The conversion from analog to digital is also opening up new opportunities for the corrugated market.
“Digital equipment can lower the barrier for companies to enter these segments. However, it is important to understand that there is a learning curve and expertise needed to properly handle packaging in order to be successful,” stresses Guyett.
According to Wittenberg, the corrugated market is currently in the early adoption phase with relatively few accounts in the digital space. As a result, early adopters are seeing a reported 25% to 50% or more growth rate, with several buying additional digital presses in one year or less.
Industrial Inkjet: Industrial inkjet is essentially printing in high volume for non-sign and display applications. This application is still very new and may require much more upfront research and experimentation, but can be a long-term and lucrative opportunity, according to Salomon.
As commercial printers work their way into wide-format digital printing, they also need to be able to provide finishing. While it’s not necessary to invest in all of this equipment on Day One, it should be a serious consideration. “Looking at cutting and finishing solutions enables the printer to be a one-stop business destination rather than incurring outside costs for outsourcing these services. It will help printers maintain their ROIs and provide competitive turnarounds for their clients,” says Guyett.
Many commercial PSPs already have devices in their workflow that can be integrated into a digital environment. Commercial shops, however, should not overlook the versatility of a standard cutting plotter. “Because commercial printers primarily speak a language of straight and cross-cuts, the added ability of virtually any shape cut or print cut enhances creativity and enables them to take on additional work that they may have outsourced to a digital PSP, which reverses the transition trend in their favor,” advises Maxwell.
Additional hardware and consumables such as cutting tables, X-Y cutters, laminators (and laminate materials), sewing/welding equipment for banners (plus hangers and poles), grommet machines for banners (and grommets), guillotine cutters, heat guns (for wraps), stretcher bars (plus wood frames) for printing canvas prints and, if needed, either a relationship with or an in-house installation team that can provide an inclusive service to the end user, are all a part of the wide-format needs, says Wittenberg.
“However, these all are not needed for every market. Extra equipment and consumables will be application-dependent with some requiring more than one of the above,” he concludes. “Do your due diligence before jumping into what looks easy and finding out later that it can be rather costly.”
These Commercial Shops Found Success in Wide-Format Market
Just-Us Printers, located in Springdale, Ark., has been in business for 35 years, and is one of the largest printing and full-service binderies in northwest Arkansas. With two 40” sheetfed offset presses — a Heidelberg Speedmaster and a Komori Lithrone — and a full bindery, it can print and finish millions of pieces easily.
On the digital side, Just-Us Printers invested in a Xerox Color 1000 digital press. In March 2016 it started its wide-format department with an Agfa Anapurna M2500i hybrid UV printer with white ink, a Mutoh Valuejet VJ-1624, a Mutoh Valuecut, and a Colex SharpCut digital flatbed cutter.
“We decided to add wide-format printing to our print shop because we wanted to offer more printing options for our existing customers and to find new customers who have a need for signage, but not offset printing,” says Brett Justus, president of Just-Us Printers.
The biggest challenge the company has faced in the past 12 months has been the substrate side of the business and what substrate to use for each application. “There was definitely a learning curve coming from the offset world, where we primarily print paper and a few plastics. Now, we can print on just about any material that will fit under the printhead,” he adds.
Some of the most profitable jobs so far have been gallery wraps and metal signage. The hybrid printer with white ink also gives Just-Us Printers a lot of flexibility to print on unique substrates, such as metal.
The biggest surprise for Justus was finding out how many of his customers were already getting wide-format printing from other vendors and how quickly his shop was able to attract new clients. “The project we are most proud of was for Crystal Bridges Museum of American Art. We printed signage for one of their exhibits where we printed direct to brushed aluminum and used opaque white for the type. The design really had a great effect with the brushed aluminum and looked great in their gallery,” says Justus.
There’s a lot more to come from Just-Us Printers. According to Justus, part of the company’s plan moving forward with wide-format printing and cutting is to utilize it for packaging prototypes. “We are currently installing a Bobst diecutter and are looking for a folder/gluer so we can expand into the folding carton business to increase our offset printing for our two 40” presses.”
Sandy Alexander Inc., Clifton N.J., is one of the largest independently owned, high-end graphic communications companies in the nation, serving the needs of businesses from small- and mid-size, to Fortune 500 enterprises from coast-to-coast. Sandy Alexander’s broad array of services include digital solutions; sheetfed and web capabilities; in-line finishing and personalization; wide- and grand-format; and printing for retail visual merchandising.
Sandy Alexander entered the $10 billion wide-format industry in 2010 and has continued to up the game with equipment investments, pushing limits on what wide-format printers are capable of. “As our client base grew, we received more inquiries about wide-format printing. From these client requests, we realized we should add wide-format services to our capabilities,” says Michael Graff, president and CEO of Sandy Alexander.
What came as a surprise to Sandy Alexander was the physical space requirements of this new department. “The amount of space needed to support wide-format printing capabilities was surprising,”adds Graff. “However, with the renovations of our building we were able to overcome this obstacle.”
In January, Sandy Alexander announced it had installed a new EFI VUTEk 5r to further expand the capabilities of its Clifton, N.J. campus. Operating in the company’s wide-format division, the 16-ft. (5 meter) roll-to-roll machine provides added high-performance technology in conjunction with its counterpart, the Durst Rho 1312 added last year.
To accommodate the demanding schedules of a growing
retail and visual merchandising client list, the company made the investment to add redundancy and minimize risk in providing the speed-to-market service that customers demand. (View a brief video that was included as part of Guy Gecht’s opening keynote during the recent EFI Connect conference here: https://youtu.be/OxOl9u5d1fI).
“Our ability to utilize additional services – not just wide-format printing – such as direct marketing, direct mail and our other services in conjunction with wide-format printing, has helped us tremendously,” Graff points out. “A fundamental aspect of Sandy Alexander’s business model is our desire to maintain close client relationships, our willingness to listen to client needs and our ability to offer them the resources to excel in their lines of business.
“Every year, customers’ expectations ratchet up as shorter time to market and lower costs are part of the narrative for businesses everywhere,” he adds. “As our customers are pressed to meet tight deadlines and contain costs, we focus on researching and investing in state-of-the-art technology, and keeping a watchful eye on how best to tighten-up our workflow to drive efficiency. Being better, faster and more
efficient is what gives us our edge.”
Founded in 1859, Owatonna, Minn.-based J-C Press is the oldest operating business in Steele County. Originally founded as a newspaper and commercial printer, J-C Press has evolved over the years, moving away from newspaper publishing in the 1930s to focus on commercial printing.
In 2009, the current owner and president, Pat McDermott, decided to expand the company’s service offerings and move into wide-format printing. Currently, J-C Press operates a Mutoh Valuejet 1638X roll printer, an Esko Kongsberg i-XL Multicut router and a GFP wide-format laminator.
“We were looking for ways to diversify our offerings and find growth opportunities in a mature printing market,” says McDermott. With the addition of wide-format capabilities, the company has been able to grow its wide-format sales by 4% to 5% per year.
For J-C Press, making use of the workflow and automation tools included with the digital printers — such as the ability to nest multiple jobs — has proved to be the most profitable. The need to profile all of the substrates was truly the biggest roadblock, however.
“Profiling the plethora of different substrates to ensure accurate color reproduction was our biggest challenge,” comments McDermott. “Vinyl runs differently than poster paper and that runs differently than PVC. We include 14 rigid substrates and 12 roll substrates as part of our ‘House’ offerings along with the custom substrates that we produce as needed.”
One of the most eye-catching jobs they did was a unique two-sided art piece that was printed on clear PVC with white ink to give it a three-dimensional look. The customer framed these pieces and they were hung in their corporate offices.
Denise Gustavson is the Editorial Director and Special Projects Editor for the Printing & Packaging Group, which includes Printing Impressions, packagePRINTING, In-plant Graphics and Wide-Format Impressions magazines, among other brands. She is also the Editor-in-Chief of Wide-Format Impressions.