New Research: Pace of Expansion by Commercial Printers Into New Printing Segments Proliferates
Convergence in the printing industry — the process by which print segments come together through print service providers (PSPs) expanding into segments beyond their primary segment — is a phenomenon that has been occurring for many years.
In 2018, NAPCO Research and PRINTING United Alliance conducted the first printing industry convergence study. The analysis of commercial, in-plant, packaging, wide-format, garment, and industrial PSPs validated the convergence phenomenon, assessed the degree to which it is occurring, measured attitudinal beliefs as to convergence trends, and defined a printing industry migration pattern.
The data is clear: convergence in the printing industry is growing. Printers in every industry segment are considering entering areas beyond their primary focus, and many have already done so. Not only has the percentage of service providers considering segment expansion increased since 2018, the number of different segments that printers are considering entering has increased substantially as well, with more than half of printers surveyed considering entering three or more print segments beyond their primary focus.
As we emerge from an unprecedented global pandemic, we are seeing changes in global economics, consumer behavior, and print buyer behavior. This research provides a critical input for both PSPs and manufacturing and technology vendors in understanding how their industry is changing and how they can adapt with it.
Commercial Printer Participation
The study included representation from across print segments with nearly half (48%) of respondents coming from commercial service providers. The breakouts from commercial segments are highlighted in the graphic below.
Commercial Printers Exploring Multiple Segments for Expansion
Looking at commercial printer findings, each segment beyond their primary segment is being evaluated by no less than 24% of commercial printers (vertical column). The segments that hold the most interest for commercial printers are label (packaging) (40%), folding carton (packaging) (37%), graphic & sign (34%), and garment (34%). Eighteen percent of commercial printers are exploring expansion in their own segment (evaluating launching new applications).
A non-trivial percentage of segments are evaluating entering the commercial segment (horizontal highlighted row). Thirty-three percent of packaging printers are considering entering the commercial segment, and 19% of in-plant and 15% of graphics & sign printers are considering the same.
Interest in Expansion into New Segments Growing
Comparing interest in expansion by commercial printers from the 2018 convergence study to the current one, interest in external segments has grown in all segments except label (highlighted column). The most significant increase occurred in corrugated (18% increase), garment (17% increase) and graphics (12% increase).
Conversely, interest in expanding into the commercial segment decreased in all segments except packaging (12% increase) (horizontal row). This decrease may be due to challenging business conditions through the pandemic. Even so, 21% of all respondents in the current study are actively researching entering the commercial market.
The Future: Continued Convergence of Print Segments to Better Serve Print Buyers
The big question for printing industry service providers, manufacturers, and vendors is “what does all this mean for the future of the industry?”
NAPCO Research and PRINTING United Alliance’s view is that convergence will continue to occur across print segments until such time that there is a blurring of the lines between different types of service providers.
This will occur because:
- A model in which a print buyer’s service provider can meet more of their print buying needs is ultimately more convenient and efficient for the buyer.
- Contraction in the printing industry and a push by service providers to find ways to grow their businesses will continue to drive expansion into additional segments and, by extension, convergence.
- Technology continues to evolve such that it continues to become easier for service providers to spin up new businesses than ever before.
Print service providers and technology/software vendors serving the market must be ready to meet the changing print landscape head-on so they can continue to thrive in the near and long term. To learn more about printing industry convergence, including must-do’s for PSPs, download the new NAPCO Research and PRINTING United Study, Convergence in Print: A Shift to the New Normal.
Join the NAPCO Printing Industry Research Panel and gain exclusive access to unpublished data and reports. Participation requires completing a 3-5 minute web-based survey approximately once a month. Follow this link to join our business panel: research.net/r/PrintPanel
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Nathan Safran is Vice President, Research for NAPCO Media. Nathan is a former Forrester Research Analyst with deep experience designing custom research solutions that solve client business problems. Nathan works with the subject matter experts across NAPCO’s brands to design research solutions that leverage NAPCO’s engage audiences and provides deep insight. Nathan is a frequent speaker at industry events and his research has been cited in the Wall Street Journal, Reuters, and Fortune Magazine.