By Melissa Donovan
Printed signage historically makes up most of the output in the wide format graphic arts. According to Smithers Pira’s latest report, published in May 2019, the global market for printed signage in 2019 is valued in the range of $43.30 billion. The Future of Printed Signage in an Electronic World to 2024 reports the printed signage market marginally declining by 0.3 percent year-on-year since 2014. However, it is forecast to recover value over the next five years with a 0.2 percent compound annual growth rate that will see the market reach a value of $43.73 billion in 2024.
As the wide format graphic arts matures, a number of activities are taking place. One is consolidation. Vendors as well as print service providers (PSPs) are growing their companies in inorganic ways such as mergers and acquisitions. Despite these consolidations, new entries are presenting themselves, showing how attractive an investment in wide format can be.
These new entries are led to the market because of the breadth of applications now possible with wide format print—specifically digital wide format. Trends in textiles, single-pass printers, automated finishing, workflow software, and personalization present new avenues for existing and inaugural PSPs. This includes reaching apparel, décor, and industrial segments.
While part of the successes in penetrating new markets is reflected in advancements in digital technology, another factor is the way we communicate today. To maintain and cultivate relationships vendors and PSPs rely on a mix of face-to-face and web-based interaction. Using all of the tools in a smart, effective manner allows for the wide format graphic arts to move beyond signage and into new frontiers.
Above: Unique Visuals NY’s recent job for James and Karla Murray led to its third place win in this year’s Application of the Year awards. In mid-2018, the Murrays created Mom-and-Pops of the L.E.S., a large-scale, wood frame sculptural installation. Photo credit: James and Karla Murray.
Vendors constantly purchase other companies and it makes good business sense. PSPs also acquire or merge with peers. The market consolidation in the wide format graphic arts over the last year included both scenarios. For example, a highly discussed and publicized announcement that occurred at the beginning of 2019 was EFI being acquired by Siris Capital Group, a private equity firm.
Collectively, vendors agree that consolidation is a positive move. “Through mergers, companies with complementary offerings bring new products to the market within a shorter timeframe due to established distribution programs and market knowledge. It’s about serving the end customer,” shares Kevin Duffy, VP, sales and marketing, Vycom, a division of The AZEK Company.
For example, Showdown Displays made a number of acquisitions in the last 12 months that benefit its customers with new locations, technology, and product offerings. “As long as it is a good cultural fit, we encourage our customers to consider this option as well,” recommends Kent Dunham, VP of sales, Showdown Displays.
Another illustration of serving the end customer, Summa’s acquisition of CadCam Technology in October 2018, which expanded its knowledge and product portfolio with laser cutting technology. “With this addition we became an expert in laser cutting technology for the textile industry. Summa is confident that the expansion benefits its users, offering a range of finishing and cutting solutions and adds value by enabling new features and possibilities,” explains Barry Budwit, VP/GM, Summa America LLC.
Top Value Fabrics’ acquisition of Pacific Coast Fabrics continues to be fruitful, shares Mike Compton, print media product marketing manager, Top Value Fabrics. “The result was a rapid expansion of our digital textile product offerings including the Georg+Otto Friedrich premiere line of textiles. Working together, we offer many new and innovative fabrics to our customers and PSP prospects.”
PSPs also conduct transactions to merge with or buy out existing companies to physically strengthen a business. “Often, the path to grow may be faster through acquisitions than organic growth,” recommends Dan Johansen, marketing manager, commercial printing business, Ricoh USA, Inc.
“With the rapid evolution of both printing and substrate technologies, it can become a challenge for small- to mid-sized PSPs to keep up with customer demand and industry trends. One simple and obvious solution is partnering with other companies, or even competitors, to get back in the game and consolidate the immediate market. The point of consolidation is to streamline operations, talents, and combine operation costs to create more agility and growth potential. Handling this scaling effectively helps reduce costs and improve pricing for customers so the business remains agile for future shifts in the market,” suggests Leonard Marano, VP, product management and marketing, automation systems, Gerber Technology LLC.
Consolidation achieves higher levels of efficiency. “Many times, merger and acquisition activity in this field is focused on building economies of scale, where an acquiring company has expertise, methods, or technology that can help an acquired business operate more efficiently. It does not mean that every PSP could or should merge, be acquired, or acquire another company, but one thing consolidation does is push things toward best practices in efficiency,” says Ken Hanulec, VP of marketing, EFI Inkjet.
“As the industry continues to move toward manufacturing efficiencies and scale of operations consolidation will continue. The largest end customers also want to work with players who can execute a deployed print strategy with quick print, kitting, and distribution, Deborah Hutcheson, director of marketing, Agfa Graphics.
For PSPs, reasons to acquire or merge extend beyond achieving larger scale, according to Adrian Cook, product marketer, premium digital print films and overlaminates, 3M Commercial Solutions. “Many acquisitions are to gain new capabilities in adjacent applications or markets, or to expand the geographical footprint to reach new customers. Traditional sign shops may choose to acquire their way into a new application such as vehicle wraps, while others may favor organic expansion.”
Adding new services or diversifying current offerings is a motivator when it comes to mergers. “In less than 20 years the digital wide format industry has reached a high level of maturity. Like all businesses that reach mature product or industry lifecycles, PSPs have the opportunity to stay ahead of the game through diversification of services and new offerings, and often this is accomplished through mergers and acquisitions,” agrees Bob Honn, senior director of marketing, large format solutions, Canon Solutions America, Inc.
“The increasing merger and acquisition activity we see in the wide format segment is not surprising based on the relative maturity of this segment. Fujifilm’s experience in newspaper and commercial printing segments was very similar, as these PSPs seek new and different products and services to add to their portfolio and explore options to collaborate and sometimes consolidate with peers,” shares Brent Moncrief, VP, marketing and brand management, Fujifilm North America Corporation, Graphic Systems Division.
A mature market isn’t something to be concerned about. One sign that wide format printing is an attractive investment is that despite all of the mergers and acquisitions, there are new entrants to the market. “While this type of activity would normally reduce the number of options for users, there seem to be new entrants at a rate that is at least as high as the consolidation taking place. In some cases, these new brands are the result of consolidation elsewhere, and in others we have seen some established brands in printing add wide format. In either case, users get the benefit of more varied options,” says Andrew Oransky, president/CEO, Roland DGA Corporation.
“I see every reason for the PSP to be excited about growth. With new applications and new substrates emerging every day, it presents more opportunities,” stresses Mark Packman, product manager, digital finishing, MultiCam, Inc.
Paul Roba, OEM relationship manager, Avery Dennison Graphics Solutions, believes PSPs should not be concerned about consolidation. “It helps strengthen suppliers in order for them to provide added benefits to their customer base—expanded services, products, and economies of scale. These benefits to the PSP make it easier for one-stop shopping, supplier consolidation, and broader product availability with the benefit of cost savings.”
Both the ISA International Sign Expo in April and FESPA in May presented common themes. Takeaways from these shows include new hardware entries into the textile market, single-pass printers, automated cutters to address bottlenecks in finishing, workflow software that improves efficiency, and personalization. The timing for all of these trends makes sense and aligns with many PSPs’ business goals.
New hardware entries for textile printing are prevalent. “Textile printing was in its infancy five years ago and it is fast becoming the go-to. Not only does it produce a vibrant print, it also ends up with a lighter weight material, increasing the size potential while making it more cost effective to ship. Dye-sublimation (dye-sub) printing is the next wave in signage,” states Dunham.
Compton confirms this, noting a shift to increased textile printing thanks to the ease of entry into the market. “This includes the launch of the HP Stitch series of dye-sub printers as well as the EFI VUTEk FabriVU 340i with inline curing,” he continues.
“Textile is especially prominent,” agrees Hanulec. “We see a tremendous upswing in volumes of work migrating to soft signage on the EFI VUTEk FabriVU series of printers. It is more relevant today compared to ten years ago because print buyers fully understand the advantages soft signage provides and for PSPs, soft signage commands higher margins.”
Beyond soft signage, digital textile printing introduces PSPs to even more applications. “The same equipment can be used to produce personalized products and greatly expands the number of potential customers. Specifically in the apparel industry, companies recognize the benefits of digital production that has started a trend in on-shoring production,” explains Tim Check, senior product manager, professional imaging, Epson America, Inc.
“We see an increased focus on both direct to textile and direct to garment (DTG) printing. The ability to print certain applications, such as garments and textiles, digitally make a huge difference. Other manufacturing processes were historically inefficient or expensive, especially with shorter runs,” agrees Johansen.
Single-pass printing is growing—not only in textiles but other applications—as more introductions are made to the space. “We already have display graphics customers using our single-pass corrugated packaging press, the EFI Nozomi C18000, at 246 linear feet per minute. Single pass can and will be a game changer. And now there are new opportunities in single pass with wood, with our EFI Cubik printer, opening a new industrial market for wood decoration,” points out Hanulec.
Hutcheson foresees single-pass printing with inline finishing as the final replacement of analog printing. “As it was in offset many years ago before computer to plate, presses were waiting for plates to run production. Now with the speeds of imaging engines from high-speed multi-pass to single pass they produce more content than current cutting systems can handle. Most average size printers cannot afford the space or the expanded capital to implement four to five cutting systems to meet demand. Now with some of the high-speed systems new options are available.”
Automated cutters’ usage is increasing because of this. Faster printers means something needs to happen on the backend equally as quickly. “We see a need for finishing automation. The ability to finish product faster and more accurately to keep up with the printers that are hitting the marketplace has become a primary motivator for increasing automation,” advises Scott Spagnolli, sales director, Zünd America, Inc. An example is the company’s BHS150 automated board handling system, which offers faster finishing while also eliminating operator handling.
“Faster and wider seems to be the trend,” admits Packman. “With 3.2- and five-meter roll devices printing two or three times faster, the bottleneck has shifted from printing to digital finishing. Coupled with a smaller window for turnaround, the need for the same faster and wider cutters is necessary to meet customer demands.”
Jan De Roeck, marketing director, Esko, explains that “issues such as increasing global competition, shorter deadlines, and faster turnaround requirements are more prevalent. When coupled with skills shortages and an increase in the complexity of product design, operators face challenges across many fronts.” The company recognizes that signage and display manufacturers today require more flexibility, efficiency, throughput, and accuracy in operations. In response, it developed the Esko Motorized Roll Feeder for soft signage applications and the Kongsberg C Edge, an upgradable digital cutting table.
Higher levels of production as well as personalization are driving finishing trends, adheres Budwit. For example, the Summa F Series product range now includes flatbed sizes with a width of 3.2 meters for blade cutting of soft signage. This introduction responds to the need for a productive and cost-effective solution to finish large banners and flags.
Werner Waden, president, Colex Finishing, Inc., believes the old way of thinking—“finishing will get done, somehow” is changing. “The next trend is inline cutting, a cutter connected to the printer. In seconds after printing, the image is ready to go to the customer. Considering the time to print a full roll plus cutting the full roll, this can add hours to the delivery time of an urgent job. The inline cutter will solve this age-old problem.”
With integration of this nature, it is important to maintain a high level of efficiency. “We introduced the concept of the micro-factory several years ago to show the interconnectivity of all of our devices and software for a complete workflow solution in a small space. Most recently we expanded our internet of things initiative with our job controller software to tie all of the pieces together for manufacturing customers and textile producers alike,” shares Michael Maxwell, senior manager, Mimaki USA, Inc.
Focusing on the whole workflow is also Durst Image Technology US’ goal. “Everyone continues to build faster machines, but in order to optimize these devices you need to consider your entire workflow. Efficiency is key,” stresses Larry D’Amico, sales director, North America, Durst. For example its newest printer features a dual roll-to-roll system that allows the next roll to be pre-staged to minimize changeover time. A flatbed system has a new sensor technology that allows for up to six boards to be transported and registered automatically and then accurately re-registered again on the back side.
Efficiency is on everyone’s mind and software addresses it. “Software, both new and updated, is increasingly part of the overall customer solution package. As the industry becomes more competitive and margins get squeezed, PSPs don’t have the available cash to run out and buy new equipment. They need to make the most of what they have. Hence the introduction of productivity solutions such as HP’s PrintOS. This allows higher levels of profitability without much or any additional cost for software,” explains Tom Wittenberg, HP Americas LF strategy, planning and content manager, sign and décor, HP Inc.
Bryan Manwaring, director of product marketing, Onyx Graphics, Inc., says “the software trend continues to focus on items which directly affect the profitability of PSPs.” ONYX 19—announced this past Spring—is built on a new performance platform designed to produce unrivaled speed.
SA International (SAi) recently released Flexi 18, with a new 64-bit RIP engine. “We see the need for faster and more powerful software, to keep printers moving and production high,” explains Sarit Tichon, SVP of worldwide sales, SAi.
Personalization is a hot topic, according to Oransky, because of the number of companies embracing digital print technology for product decoration. “The latest developments in printers have allowed users to print on almost anything, and with the profusion of web to print (W2P) and low-cost online store platforms we see entire businesses set up around the idea of offering personalized consumer products and apparel. As existing brand owners jump into customization and these new businesses grow, the ability to process orders on a one-to-one basis and create efficiencies despite very small run sizes will become crucial.”
Mark A. Rugen, director, product marketing and education, Mutoh America, Inc., believes that ecommerce or W2P capabilities make personalization possible. “These systems are becoming more available and sophisticated and manufacturers as well as consumers are beginning to adapt this evolution in the way business is conducted. Look for even more interfacing between PSPs and the consumer through online solutions.”
The Convenience of the Web
The world is shrinking—it’s easier than ever before to view products in real-time without leaving the comfort of your desk. Skype, webinars, social media, and the list goes on—these are all multi-faceted platforms that enable PSPs to share projects with customers and coincidentally allow vendors to promote the newest products and services. However, we work in an industry that requires a level of face-to-face or face-to-sign interaction that cannot be necessarily achieved over the internet.
“A quick internet search will tell you all you need to know about the truncated customer buying journey, and how much more informed they are than a few years ago. While Fujifilm acknowledges this evolution, we continue to be heavily committed to in-person interactions. The difference is the level of preparation and expectation setting in advance of a one-to-one session, and the diligent use of other communication channels to handle the more mundane, tactical issues, enabling more mutually meaningful discussions when they do occur,” shares Moncrief.
Multi-faceted approaches seem to take precedence, at least on the vendor side of things. Canon Solutions America promotes and generates awareness by using all platforms in its marketing mix including social media, print and digital advertising, webinars, and trade shows. “Without question since printed graphics is such a visual medium, a level of face-to-face interaction is key. We accomplish this through three avenues—face-to-face using our sales and professional services teams, customer benchmarking and demonstrations at our Customer Experience Center, and industry events,” says Honn.
Marano suggests that the web is a great tool to remain in front of customers and provide them with easier access to information from tutorials and how-to guides to video-based troubleshooting. “We leverage the web to add a more personalized element to our customer interactions, but always rely on face-to-face interactions to maintain and cultivate relationships.”
Gerber recently launched a live web demonstration system where customers can send the company materials and watch them processed live over the web in its new demonstration facility. “This saves our customers travel time while still providing them the data and assurance they need to make an informed decision,” explains Marano.
HP takes a multi-faceted approach with leads via social media or webinars but following up in person. “We are not selling online at Amazon or others because we do realize the high touch requirements of the market,” points out Wittenberg.
“For Mimaki, utilizing the platforms that allow us to connect remotely gives us an opportunity to understand the customer’s needs before the customer or our staff incur the expense of going face to face. By doing this we have become more streamlined in our sales processes and are able to provide the customer a much better experience once we do interact with them in one of our showrooms,” shares Maxwell.
At Roland, webinars are effective tools for product overviews and ongoing training. Online chat is used to converse with customers and potential buyers, however, Oransky finds that when making a final decision, buyers want demonstrations where they can work the equipment themselves. “As new communication tools become available, we always ask how they can be most useful to our audience, but never view any of them as a one-size-fits-all solution. As a result, on a daily basis, we interact by phone, email, chat, social media, webinar, and in person, depending on the right fit for the customer,” he continues.
“I think wisely using a balance of approaches is key,” recommends Duffy. “PSPs want to see, touch, and explore—they want to feel the smooth surface of a printed piece, judge the heft of a material for a given application, and understand the synergy of hardware, software, and materials working together. This is where face-to-face interaction is a must, through collaborative open house events, industry conventions, and targeted engagements to show PSPs how to create applications or simply spark ideas that fit into their own shop’s capabilities.”
The visual nature of the graphic arts instills a need for human interaction. “Our industry is based on creating an experience with graphics that can be seen in the environment they were created for. Technology is a powerful tool, but still not a complete alternative to face-to-face meetings. It can speed things up and make it easier to connect with people in remote situations. However, long-term, stable business relationships are built where the customer and vendors interact on a more personal level,” states Wayne Colbath, VP sales, Drytac.
According to Janelle Pizzi, product marketer, IJ reflective and intermediate films, 3M, training, troubleshooting issues, and relationship building are best done in person. “Even with the expansion of digital connectivity, 3M believes in the importance of face-to-face interaction and as a result we maintain a large field sales presence. We see a continued need for local representation and live in-person events.”
Roba agrees, saying that regional sales and technical support structures create an intimate bond that assures a PSP is being serviced and supplied with the highest quality. “The world is getting smaller on a daily basis, however that doesn’t diminish the need to build personal relationships. These relationships are still strong drivers to the purchasing decision of many non-commodity type products,” he believes.
For many, including Spagnolli, nothing can replace seeing, timing, and watching a job being processed as part of a personal demonstration. Trade shows, on-site demonstrations, and experience centers provide hands-on engagement.
“Prior to making a sale to new and current customers, it is important to not just provide product information but also to work closely with PSPs in their shops to understand their complete production flow from start to finish including a high level knowledge of their printers, inks, software, and finishing equipment,” adds Compton.
Similar to vendors, PSPs need to view the web as a tool that can easily be leveraged to allow customers to evaluate options, create orders more effectively, and monitor processing status in real time, advises Marano.
“PSPs should keep in touch with the market through educational tools. Live seminars, webinars, and blogs show the practical applications of products. PSPs have an opportunity to offer brief live demonstrations of how to use their services,” recommends Rugen.
Wittenberg maintains the importance of identifying the customer base and knowing the best way to reach them—web or in person. “PSPs have a bit more freedom to use both to drive sales. It’s really about knowing your customer base and the profile of each customer. There may be a portion of customers that are technological savvy and prefer just to order from a menu online, frequently. Others, especially the larger, frequent purchasers, expect more of a high-touch approach.”
An example of when a “high-touch” approach might be beneficial would be a PSP working on a complete retail rollout—from concept to design to finished product. In this scenario, “there is nothing more important than meeting face to face with a customer to present solutions that incorporate ideas to enhance a brand,” advises Packman.
Check points out that it depends on the customer’s level of preparedness. “Online works well when customers know what they want and are familiar with the products being offered, such as ordering a basic banner for a restaurant grand opening. Personalized and specialty products such as metallic signage or printed fabrics do not translate well to online. Seeing these in person and feeling the texture is important in the design and purchasing process,” he suggests.
“Like anything else, it’s knowing when to use the right tool at the right time and not over focusing on one to the detriment of the other. For PSPs, it’s especially important, because the more you reduce in-person interaction and rely on electronic communication, you increase the risk of commoditizing your products to the point where the print buyer may not see your value,” warns Johansen.
For those thinking about entering the graphic arts, and specifically wide format digital printing, vendors stress the importance of application diversity. Check believes the market is more than banners and signs. “Wide format products can also produce personalized and on demand products cost efficiently and open up access to many new markets.” He points to digitally printed textiles in particular. Currently, it is only a small portion of the printed textile market, but is forecasted to maintain double digit growth for the foreseeable future.
“The wide format graphic arts market is about applications. The equipment, the media, and the software allow shops to touch the lives of the public in general. Customers range from family to mega-companies. Everyone needs the service of a wide format shop and there is plenty of room for growth,” agrees Rugen.
Barrier to entry is low, as price points on equipment are attractive to first time buyers. “Digital print is growing, the time to expand and explore new applications is now. Becoming a viable player in the digital wide format graphic arena is very much within reach,” adds Honn.
Aug2019, Digital Output