Commercial Print Convergence Continues in 2019

“Convergence” happens when print service providers expand from their core businesses into adjacent market segments as a way to grow and diversify. In 2018, SGIA and NAPCO Research collaborated to test the “overarching hypothesis” that convergence is real and that increasing numbers of print service providers are embracing it.

The study surveyed more than 400 print service providers in six different segments (commercial print, graphics, in-plant, garment, packaging and industrial). Nearly everyone surveyed (95%) believed convergence offers opportunities for expansion, and virtually the same number (93%) think that print service providers are in fact expanding into other market and product segments. Four out of five (81%) believed the trend will accelerate over the next five years.

Across all segments surveyed, commercial printers reported the most significant expansion into new markets, with the highest migration to packaging and graphics and signage.

This trend will both continue and accelerate in 2019 as technologies become more affordable and printers aggressively try to become one-stop shops for their clients as well as aggressively grow their businesses. There are several recent convergence examples that highlight how service providers are expanding into new services through either acquisition or organic growth to better serve their customers.

Graphics and Signage

Sign and display graphics is one of the easier areas for commercial printers to pursue. Wide-format printing devices enable commercial printers to produce, in-house, everything from banners, window graphics, wall coverings and signage to point of purchase displays, posters, apparel decoration, labels and vehicle graphics. In addition, a wide-format printing device offers commercial printers the ability to enter the proofing and package prototyping market. Today’s wide-format printers can handle short and custom runs easily. Personalized graphics continue to be in high demand, and they are extremely profitable to produce on a per-unit basis.

Commercial printers possess important skills and experience that ease entry barriers into sign and display graphic printing. These firms have design skills, color management expertise and mastery of other printing processes they need to serve customers well. And since many of their customers are purchasing wide-format graphics elsewhere, it makes great business sense to bring this service in-house and become that one-stop shop for them.

Examples of companies adding sign and display graphics to expand into new markets and increase business growth abound. Here are a few examples:

• On February 5, 2019 Sandy Alexander, Inc., a provider of integrated multi-channel communication solutions, announced it acquired Signmasters, Inc., Passaic Park, N.J. Commenting on the deal, Sandy Alexander President & CEO Mike Graff, said, “Signmasters’ specialization in wide-format allows Sandy Alexander to further expand our operations in the retail vertical, but also in offset and digital print production.”
• Some commercial printers are organically growing their graphics and signage businesses linked to customer demands. Chicago based, Tukaiz, a marketing services production company, started as prepress company, migrated into digital print and commercial print and expanded into large-format. Tukaiz invested in the necessary equipment to meet customers’ growing demand for wide-format applications and customized cross-media marketing campaigns. Several of its customers are franchisors and they generate versioned signage from the company’s proprietary online marketing management system and production process, Backstage.
• Peoria, Ill.-based PIP printing added sign and display graphics in 2005. According to Managing Partner PIP Printing & Marketing Services Shane Parker, “Our annual revenues are $3.6 million. Today, 16% of that revenue is derived from large-format production.”

Getting in the Game

For commercial printers trying to accelerate the movement to graphics and signage applications, franchise organizations like FASTSIGNS are offering co-branding opportunities. According to the franchise’s website, their program allows service providers to add a FASTSIGNS center to the existing business and get ongoing training and support from the franchise system for $15,000 down. The program allows commercial printers to retain their original identity while expanding their product lines and services.

The Bottom Line

In 2019, sign, display and specialty graphics will continue to be an attractive convergence opportunity for print providers that are looking to expand into adjacent markets. Many providers have already invested in digital wide-format printing devices capable of producing those applications or are considering doing so. By adding sign, display, and specialty applications to the product mix, providers can broaden their service offerings, stand out from the competition, increase revenues and improve customer satisfaction. Printing sign and display graphics can be an important and profitable opportunity for you in 2019.

For more insight on market convergence opportunities, download the full report.