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Part 1 of 4

By Gretchen A. Peck

Certainly there’s a lot of technological and consumable overlap between traditional sign shops and vehicle wrap specialists. The two use a lot of the same equipment and are both adept at working with vinyl-based media and durable, outdoor-suitable inks. But does it make sense for traditional sign shops to move into vehicle graphics?

"The vehicle graphics market is probably the number-one growing market in the large format graphics industry today," suggests Tim Boxeth, marketing manager, 3M Graphics Market Center.

"We are certainly seeing a steady increase in demand for our family of vehicle wrapping films and overlaminates, especially in the past three years," explains David Grant, VP marketing, Oracal USA. "Coupled with the informal feedback we receive daily from our distributors and end users, it’s obvious that vehicle wraps will continue to represent an important growth market for us going forward."

"There is plenty of market development research data indicating the growth of vehicle wraps," notes Jeffrey J. Stadelman, technical marketing manager, graphics, MACtac Graphics Products. "The Outdoor Advertising Association indicates transit advertising as 11 percent of the outdoor market. This includes buses, taxis, truck sides, and airplanes."

"We see the vehicle wrap market as one that is not only rapidly growing, but incredibly diverse," Grant remarks. "As the demand for wraps grows among not only sign shops but newer markets, such as automotive restylers, the printing and installation of vehicle graphics is an appealing business opportunity. Ranging from the smallest, one-person sign shops to large, specialty printers and full-service firms that truly specialize in wraps."

How much potential print business is out there for a traditional sign shop? "That is the burning question that a lot of people have a tough time putting their arms around," notes Joel Ross, marketing communications manager, Avery Dennison Graphics and Reflective Products Division. "With the fleet market, it pretty easy to identify and measure. Vehicle wraps, well, every one is a one-off."

It is difficult to pinpoint the precise market potential, concurs Tom Durner, manager of strategic alliances, Avery. "Take the number of cars. And that’s it," he chides. "But seriously, when you look at the market, every vehicle out there represents a potential vehicle wrap. And if you only get one percent, you’re kickin’ butt!"

Rolling Research
Mary-Beth Kellenberger, consultant, Frost & Sullivan, a TO, Canada-based firm, began studying the vehicle wrap market by way of researching the custom paint industry. She agrees that it’s a market difficult to measure, because there are so many variables involved. Interestingly, the potential market—every car, truck, bus, etc. on the road today—is not same as the actual market.

Most people do not have the desire to wrap personal vehicles. And even commercial vehicles—take limousines, for example—may not be appropriate to wrap. Then, there are commercial vehicles that are, or will be, wrapped, but in a cyclical way.

"Taxis and buses from places like Las Vegas, NV where you may have a lot of show promotion, may rotate more often than in other locations," she explains. "You may wrap them every three months, six months, or even for just a week, depending on the promotion. City buses, too, are usually wrapped on a contractual basis, and those may only change every six months."

In preparation for the Frost & Sullivan study, Wrap It Up, Kellenberger was offered figures by media suppliers between $220 and $250 million as estimates for the North American vehicle market.

"Those are their numbers, not mine," she clarifies. "And they are difficult to verify, because often they aren’t necessarily aware of where the wrap material is going. They may know that it’s going to a sign shop, but are they wrapping a building, putting it on a floor, or on a car? We do know certain materials are more likely to be used on cars than other types of applications."

Kellenberger’s research allowed her to estimate that there are approximately 40 operations in North America outputting high volumes of vehicles wraps—partial and full, with approximately 4,000 businesses producing smaller numbers of graphics for this purpose. Based on further calculations she predicts that there are anywhere between 45,000 to 59,000 vehicles ripe for wraps at the moment.

Not For Everyone?
What’s perhaps even more intriguing than market potential is the diversity of players in the marketplace. Not only are traditional sign shops and true vehicle wrap specialists capturing some of this business, other non-print organizations are carefully watching the market also.

"This is a really interesting topic for the after-market companies—the folks who are doing things like installing bedliners or electronics, or doing body work, repair, and collision. And then there are the custom paint businesses," Kellenberger notes. "A Pep Boys type of business, for example. After all, they’ve been selling things like decals for a long time, so they’re asking themselves whether there’s money to be made by offering bigger wraps or wrapping as a service. Can they bring this service in-house and have it be a lead generator?"

Though the vehicle wrap market appears to be vast and ripe with possibilities, it may not be a market that every print business out there—signage, commercial, and others—should tap, because it’s a genre of print that requires a unique sell, an attention to customer service, and installation challenges.

"Just because you can doesn’t mean you should. That couldn’t be a truer statement when it comes to vehicle wraps," cautions Troy Downey, owner, APE Wraps, based in Coronado, CA. "To get into this business, you have to have a realistic ability to seek and achieve perfection. Just because you’re a printer already doesn’t mean that you’ll automatically have in your DNA the ability to be able to start executing the precision necessary for vehicle wraps."

To immerse your business—machinery, time, money, and employees—in the vehicle wrap niche may seem like a no-brainer on the surface. Despite the booming demand for wraps a vehicle wrap supplier must possess the creativity and know-how to come out on top. To find out more about the vehicle graphics market and to discover whether your print organization may be well-suited to enter this business, check out the next three installments in our series—and our full print article in November—on vehicle wraps.

Sep2008, Digital Output

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