Year in Review
2010 brought a mix of optimism and consolidation.
By DPS Staff
Print professionals are adept at making the most of investments and looking for new opportunities. Buyers request lower costs and quicker turnarounds. Consumers are more resistant to traditional marketing methods, favoring relevant and personalized communications. Major industry transitions are driving the future of print.
High-speed inkjet plays a large role. Target markets for inkjet production include books, magazines, newspapers, direct mail, and transactional printing. Advancements in ancillary products, such as media and finishing solutions, widen the opportunity.
All eyes were on the economy in 2010. Many segments of print were affected as mail volumes declined and budgets tightened. A continued trend of market consolidation is also clear. As reports show a slow recovery, we look ahead with optimism.
The following pages include executive and analyst reflections on the industry as a whole, as well as insight on what to expect in the near future.
Agfa GraphicsDeborah Hutcheson, Director of Marketing
The printing industry is in transition. 2010 will go down as an economically challenging year, but also as the turning point. This year many companies decided to do what was necessary to sustain their current business and position themselves for future growth. Many printer service providers (PSPs) invested in new technologies, such as automated workflow to improve turnaround and production inefficiencies. Many invested heavily in inkjet printers and presses. According to the Association of National Advertisers’ Shopper Marketing: Connecting with Consumers at the Point of Purchase Report, 68 percent of all purchases are impulse buys and 70 percent of consumers make purchase decisions in store. This means the demand for point of purchase, packaging, short-run promotional, and retail printing continues to grow.
Despite the increasing popularity of electronic media, an integrated approach is the most powerful. 2010 showed us we have the creativity and the technology to ensure printed communications remain relevant and valuable to end users for many years to come. As such, Agfa continues to aggressively develop solutions that support the delicate balance between financial profitability and ecology. Additionally, we continue to invest in inkjet.
Avanti Computer SystemsStephen McWilliam, EVP
As we reflect on 2010 and look at trends dominating 2011, two things are clear—the market has changed forever and cost is still a four-letter word. Print volumes are lost to less expensive electronic alternatives such as Web and mobile media and they aren’t coming back. That leaves printers fighting over a smaller pie. Any revenue gains must come at the expense of other players, or they have to change what makes up the pie.
The key to success is to sell smarter. Sales teams must have an intimate understanding of their best and most profitable customers. Customer relationship management technology plays a critical role in delivering on this. It is important to understand the actual costs of every job.
C.P. Bourg Inc.James Tressler, Director of Marketing and Branch Operations
Print providers and buyers in 2010 experienced the continuing effects of an analog/legacy/offset world of the past colliding with the super efficient/touchless/digital world of the present and future. These changes are part of a major shift apparent in a print industry in which on demand, just in time, zero waste, and full service are watchwords for survival. Legacy printing equipment with long depreciation curves and aging methods are still used for some printing applications, but digital printing technology ultimately prevails.
Within this context of increasing print efficiency and flexibility, finishing becomes increasingly important and valuable. It is a vital link in an integrated production chain, providing the power to generate more profits from existing and new customers and market sectors than any other ancillary print service.
That’s why forward-thinking trade binderies add digital printing services, savvy commercial printers add on demand binding and finishing systems, and enterprising in-plants expand their repertoire to include both.
Canon U.S.A.Sam Yoshida, VP/GM, Imaging Systems Group
2010 was a transformative year for Canon as we achieved extraordinary results due to the market acceptance of our new imageRUNNER ADVANCE and imagePRESS products, an expanding portfolio of solutions and services, and new channel relationships. Continued investments in technology result in new growth opportunities and improved positioning across each of the major product categories in which we compete.
For 2011, Canon plans to build upon the momentum of new products to drive additional market share gains, while also utilizing integrated software solutions to increase productivity across the enterprise and production printing markets. Further, the inclusion of Océ into the Canon family significantly expands our market reach. Canon is now capable of addressing more business opportunities in the mid- and heavy-production markets.
DirectSmileEdward J. Ickowski, Director, Sales/Business Development
2010 began with customers in an investigation and education state of mind. Printers, marketing service providers (MSPs), and corporate America were not necessarily interested in what was new. They were more focused on what was potentially missed from the purchasing paralyses of 2009. With buying somewhat frozen, software providers spent time refining current products and developing new ones.
This year focused on the implementation of existing technologies, developing easier to use solutions, and providing marketing road maps for customers. The combination of technology and partnership will eventually lead to that eureka moment we strive for.
Products and concepts like quick response (QR) codes, variable data publishing, image personalization, and personalized URLs (pURLs), have been around for some time, but the industry is embracing them for four key reasons. Consumers are desensitized by current, traditional methods of marketing communication. Younger generations are less concerned about privacy and social media is more pervasive. Digital is a key survival tool for anyone in the communication space.
For DirectSmile, 2011 will be the year our innovations reach that "aha" status. We continue to educate, empower, and partner with clients. The question "how did they get that airplane to spell my name in the clouds?" will be a thing of the past.
EFIFrank Mallozzi, SVP, Worldwide Sales and Marketing
In 2010, EFI focused on delivering exceptional products and services to customers around the globe. We continue to drive the industry transition from analog to digital printing. We’ve seen an increase in customers buying multiple EFI solutions to provide leaner manufacturing, and to also maximize return on investment (ROI) through integrated offerings. In particular, print providers now understand the true value of end-to-end management information systems (MIS) to ensure cost visibility and a streamlined workflow. EFI’s focus on innovation, efficiency, and "green" printing led to the launch of the Fiery VUE application earlier this year.
We are optimistic about the future of print. The road ahead is still bumpy, but we continue our high level of support and large investment in R&D so customers have the best products on the market.
Epson America, Inc.Mark Radogna, Group Product Manager, Professional Imaging
The printing industry still faces significant challenges, but there are finally signs of stabilization. The economy tested many in the print world, but it also opened new avenues for growth. More importantly, many companies are better at reducing expenses and product turnaround times while improving quality and the bottom line.
Developments in inkjet technology brought a fundamental shift in how we view the market. Today’s environmentally friendly technology produces astounding print quality. The latest Epson inkjet printing technology redefines how contract-quality proofing is produced for commercial or flexo printing. We’ve also developed a new generation of solvent-based printing for signage, vehicle wraps, fine art reproduction, and those supplementing existing print production for a wide range of print jobs.
Fujifilm North America Corp.Phil Kane, VP, National Equipment Sales, Graphic Systems Division
As we entered the last half of the 2010, we saw an upturn within our customer base. In the last 18 to 24 months, printers were very selective about investments, especially with technology changing more rapidly than ever before. They are listening and reacting to change.
As we approach 2011, printers continue to adjust their go-to-market strategies to accommodate the demand for short-run printing as offset and digital print converge. Offset printers will diversify to incorporate digital devices into their workflows for short run and wide format printing. New inkjet technologies continue to emerge, allowing them to implement digital solutions that offer the quality of offset with the versatility of digital.
Fujifilm maintains its commitment to helping print providers navigate a rapidly changing industry, make sense of new technologies, and understand the benefits of investing in them.
Hewlett-Packard (HP)Jan Riecher, VP/GM, Graphics Solutions Business, Americas
Industry trends and momentum in 2010 solidified digital color’s status as the growth engine in commercial printing. Targeted, highly personalized marketing and the virtual elimination of inventory make digital preferred among progressive publishers and marketers. Innovative PSPs rise to the occasion and are rewarded with growth at a time when print volumes overall are flat or declining.
HP’s extensive portfolio of digital print equipment took customers to new levels of success in 2010. In turn, those customers are accelerating the industry’s transition from analog to digital. For example, by the end of 2010, there will be approximately 20 HP T300 Inkjet Web Presses installed and operating at customer sites worldwide. Considering that each of these presses offers a 70 million page monthly duty cycle, the T300 install base on its own has the potential to have a positive effect on the amount of digital printing the industry produces.
With the commercial introduction of solutions like the HP T200 and HP T350, we see more reasons why digital has become a core profit opportunity for PSPs. Digital printing continues to grow, with more personalized, targeted, and printed on demand products that bridge the online and hardcopy worlds.
InfoPrint Solutions, a Ricoh CompanySandra Zoratti, VP, Global Marketing
In 2010, InfoPrint customers adopted and employed three key capabilities—color, precision marketing, and workflow, which set the stage for continued growth in 2011.
Color technology played a huge role in enabling higher quality output and new revenue channels. For example, Frederic Printing utilized print-on-demand (POD) capabilities with our color solution driven by the InfoPrint 5000, which provides them with the flexibility and versatility needed to service the higher education market with POD textbooks. We’ll continue to build on this application in 2011.
Precision Marketing is a critical component to developing and delivering targeted, relevant messaging and demonstrating positive, measurable results. Across our customer base, companies leverage these capabilities to achieve double-digit ROI. Customized communications reign supreme, and continue to factor into retaining and increasing customer loyalty in 2011.
Workflow continues to gain momentum as the foundation of efficient, productive, secure, and compliant operations. Workflow is a solution whose payback can often be counted in months and typically dwarfs any initial investments required to implement the solution.
Underpinning these three areas is the need for expert skills in professional services. Investing in them helps ensure that our clients meet the full breadth of needs in the marketplace today and in 2011.
KodakTim Palmer, VP, Americas Consumer and Commercial Marketing
Over the past year, businesses of all shapes and sizes felt the impact of change. These forces were significant in industries such as marketing/commercial print, packaging, publishing, data-driven print, photo products, and enterprises. Those who embrace the change and rely on innovation are well positioned to capitalize on new revenue and profit streams, strengthening business along the way.
This change is most evident in the area of marketing. Email and online media deliver the right message to the right person at the right time. However, as email traffic has increased, recipients increasingly use the delete key before opening direct marketing messages. Marketers must find new ways to reach consumers and connect on a personal level.
New technologies make it possible to create highly-personalized direct mail to engage consumers as never before. Adding an interactive component—such as a pURL or QR code—to direct mail pieces generates even stronger results.
Konica MinoltaKevin Kern, VP, Marketing
This year, we delivered on our promise of continuous innovation and advanced technology with the launch of our new line of bizhub PRESS high-speed digital press systems. Throughout the year we succeeded in delivering an even higher color quality, lower total cost of ownership, and increased customer satisfaction across all of our product lines.
For 2011, new technology, combined with our Business Development Services (BDS) Program, helps our dealer partners and customers drive revenue growth and take their businesses to the next level. Konica Minolta’s comprehensive BDS offering provides users with materials such as white papers, videos, and Webinars to help them develop innovative digital business strategies, launch new digital applications, and learn from our customer success stories.
Muller Martini Corp.Carrington Herbert, National Sales Director
Digital print technology is now at the top of the list when it comes to investing in graphic arts equipment. Traditional offset presses have taken a backseat.
Like many cutting-edge technologies, early adopters are typically leading industry players, and the printing environment is no exception. Large, multi-plant facilities have both the foresight and the capital to enter new markets. Moreover, customers pull them into digital, demanding vendors to make the leap so that they can better control inventories and provide more personalized products.
The digital print market is starting to go mainstream as small- to mid-size printers recognize the critical need to satisfy their existing client base, while also capturing new business. Why the escalating attention on digital among the smaller guys? Mid-size print engines, typically 20.5 inches in width, are emerging, making entry into the market not just do-able, but affordable. That is good for the entire finishing world.
Océ North AmericaFrancis McMahon, VP, Marketing, Production Printing Systems
Overall, our industry continues to feel the effects of the economy. Commercial print and graphic arts providers’ core applications are under attack by alternate channels. The market continues to consolidate, and print providers migrate to digital printing to gain an edge.
Many of our customers are resilient because of the visionary ways they adapted their businesses. For example, companies invested in Océ cutsheet systems for digital book publishing and others acquired Océ inkjet technology to develop TransPromo business. We’ve responded as well, with enhancements to workflow software, greater speed and finishing flexibility for cutsheet solutions, and more variations within our color inkjet platform.
According to the PRIMIR Megatrends in Digital Printing study, production digital printing is expected to grow at an average of 11 percent through 2014. Already, the revenue generated by these pages is approaching that of offset. In categories like marketing collateral, 44 percent of print providers indicate the shift to digital printing has reached a tipping point.
We expect to see interest in transformation continue, as service providers, book publishers, and others feel pressure to adapt their services to the changing market. The newly announced Océ Press Go! program helps print professionals grow print volumes and capture more opportunities by addressing business and operational issues.
Pitney Bowes Inc.Ramesh Ratan, President, Document Messaging Technologies
Companies revolve around consumers, not the other way around. They have never been more powerful, and they exercise power in ways that companies must heed. Consumer demands include, "don’t dictate the timing or the channel in which you communicate with me. Let me choose the channel. Let me choose the timing. And, in some cases, let me choose the content you share with me."
Printers and mailers play a crucial role in helping companies adapt to a new reality. Those at leading print and mail operations know how data, variable messaging, and high-speed color printing, can be intelligently used together to deliver customized offers to targeted consumers. Take note—this knowledge is gold to marketing colleagues.
For large printers and mailers, recent trends in technology are generous indeed. Customized print messages fall in price as they improve in quality. Imagine a roll of blank paper, three statements wide and two football fields long, running through a digital color printing press. Sixty seconds later, it has printed thousands of TransPromo statements. In 2011, that becomes reality.
Advanced technology is helping smaller companies as well. Software delivered over the Web makes it easier to identify more precise clusters of customers and prospects. A marketer can design an offer, print and mail it, and pay with a simple credit card transaction.
PresstekKathy McHugh, CMO/SVP
Although the ramp-up to IPEX in early 2010 was slow, the global economy showed signs of improvement. IPEX was a pleasant surprise for the industry—well attended by enthusiastic buyers looking to take advantage of improving conditions to ensure production platforms were in line with market demands. Presstek launched its 75DI at IPEX and demonstrated it again at Graph Expo in the fall. Its acceptance by attendees is a clear sign that we are on the right path to serving the dynamically changing needs of the industry.
2011 promises the continuation of a renewed energy and vitality in the industry. Although there was significant consolidation through the recession period, it leaves the industry healthier overall, and all constituents will benefit.
The most important consideration to keep in mind as we enter 2011 is the need to streamline operations by removing waste and increasing automation, without sacrificing quality.
Ricoh Americas Corp.Carl Joachim, VP of Marketing, PPBG
The economic conditions of the past few years have been no stranger to those in this industry. While returning to 2008 levels of revenue growth remains unseen at this point, we forsee overall market stabilization. We are now able to witness the extent of the economic downturn that began in October 2008 and use this to reassess current market needs. Looking forward, the evolution of solutions that drive process efficiency and new revenue streams for our customers seems to be where investments are made. For those hardware manufacturers that can provide affordable value while continuing to provide advanced technology and service offerings, the road ahead looks positive.
This is why Ricoh’s plans for 2011 continue to focus on the mid-production color space, from hardware and solutions, as well as a services perspective. Current trends imply that the adoption rate of Web-to-print (W2P) continues to increase, thus providing our customers with an ability to offset run length declines with new sources of print volume. Mid-production color—supported by solutions that drive personalized output—is where we continue to focus our services.
The industry is quite possibly at the beginning of the most rapidly evolving period of change we’ve seen since the days of Ben Franklin. The crossover of new digital technologies drives this into everyday life, like the Apple iPad combined with today’s financial imperatives to work differently.
RISO, Inc.Kevin Hunter, Executive Director, CMD & New Dealers
This year represented a great deal of waiting, uncertainty, optimism, and general change in the marketplace. From the consolidation of distribution channels to the cross marketing of products by one-time competitors, 2010 showed every member of the digital printing industry the necessity of embracing change with open arms.
The outlook for the digital publishing industry continues to improve with low-cost, full-color printing equipment leading the way. Consolidation, product development, digital evolution, and consumer habit changes represent obstacles and opportunities. When the number of products placed that serve the digital printing industry are analyzed for 2010, the trend of growth in full-color inkjet is expected to continue while other products decline.
Perspective, strategy, and planning decide a company’s fate. Production-level magnetic ink character recognition and envelope feeding accessories augment the ComColor line to further solidify the value of RISO.
As a wholly owned subsidiary of Japan’s Riso Kagaku Corporation, RISO, Inc. follows a Japanese custom of using a watch word to focus efforts and remind us of our collective strategy for the year. "Build" is the word for 2011.
Screen (USA)Bill Brunone, VP, Targeted Inkjet Systems
Perception is everything in business. While the Great Recession officially ended in June 2009, many small business owners are still waiting for evidence. As if a weak recovery weren’t enough to give printing company owners pause, bad economic data cancelled out not-so-bad and even good economic news, often in the same cycle. It is no surprise that the domestic outlook remains subdued.
Nevertheless, optimists found cause for relief this year. A rebounding economy creates higher demand for pamphlets, brochures, and direct mail. The consecutive monthly increases in the value of U.S. commercial printing shipments in the second and third quarters of 2010 augur well for the industry.
Indeed, some segments of the print market proved quite resilient. Consumer packaging for the most part weathered the economic storm, since new consumer goods lead to new packaging boxes, sleeves, and manuals. In addition, adoption of high-speed variable data printing will accelerate in the coming year.
Standard Finishing SystemsDavid Reny, EVP
Non-stop consolidation of the past few years leaves a smaller, healthier, more diversified and tech-savvy print community. While post-press suppliers like Standard now serve fewer customers, those hardy survivors are more open to new technology and recognize the need to re-tool their production for the next wave of business.
Disruptive technologies like fast, wide-web inkjet forces fresh thinking on converting paper into finished documents or inserted mail pieces. Heavy-iron post-press does not adapt well to short-run digital work because of the need for quick changeovers. Add personalization, sheet-level integrity, and no tolerance for spoilage, and bindery efficiency drops.
Advancements in intelligent automation and ease-of-use allow some post-press solutions to straddle analog and digital. Standard Horizon folders, binders, trimmers, and saddle stitchers sport touchscreen automation, and we’re now linking them together into a bindery management system that sends and receives data from a print MIS. Digital control across the print enterprise will be critical, as customers look to accurately measure bindery productivity and profits.
PSPs who thrive in this environment have nimble leaders who understand their markets, build on their strengths, and partner with suppliers who help them assemble the right technology and support pieces into a coherent workflow.
Xerox CorporationGina Testa, VP, Graphic Communications Industry
This past year proved that a recession is a terrible thing to waste. Many print providers were able to reinvent themselves, finding new niches and entrenching themselves as MSPs. They’ve created ways to do more with less and help their customers be as strategic and effective as possible.
Our customers have seen real value in positioning themselves to offer full services and new ways to implement ideas and strategies into their businesses. Print providers should resist the urge to return to pre-recession ways of thinking, look forward, continue to innovate, and use creative thinking to demonstrate new ways to achieve ROI.
One indicator of this forward trend is the growth in digital technology. Applications that our customers are the most jazzed about are often those best served by digital. Markets like education are ripe with opportunity.
Cross-media campaigns will continue to gain steam in 2011. Customers are consistently providing feedback that their clients’ most effective campaigns are a multi-media mix where print is only one part. This prompts an expansion of capabilities and offerings, contributing to the rise of MSPs. I foresee this trend continuing in the year ahead.
XMPie. a Xerox CompanyKarin Stroh, VP of Marketing
Despite what continues to be a difficult economy, the graphic communications industry is surviving. Many printers decided that print is just one piece of what customers are looking for and add other service offerings, such as e-mail and the Web. While print continues to be an important component of a fully integrated marketing communications strategy, the latest trends involve pURLs, QR codes, and W2P sites.
Marketing campaigns that use more than one media, including print, show increased response rates of 35 percent in comparison to traditional, print-only campaigns. This is why more customers look for PSPs that effectively strategize with them and offer personalization, database management, and campaign tracking and reporting.
Based on this growing e-communication trend, XMPie introduced a hosted e-media solution in 2010 that allows variable data print customers to move into the cross-media space without a major IT investment.
Editor’s Note: As addressed by several analysts and industry experts, the emergence from a tough economy strengthens the products and providers currently playing in the space. A thorough assessment of current business models and sales strategies and the addition of the latest technologies help to fuel future growth. dps
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Dec2010, DPS Magazine DPS5004