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Trade Comment

Economic Picture for Print in 2018?”

The print industry seems to have stabilised over 2017, experiencing both growth and contraction. Brendan Perring asks: “What are your views on the economic picture for print in 2018?”

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Bob Usher, managing director, Apex Digital Graphics

Certainty ahead

The biggest single challenge facing the commercial print sector during 2017 has been a lack of confidence caused by uncertainty over the outcome of Brexit. I am hoping 2018 will at least bring a definitive divorce bill, then negotiations with our EU partners can move forward on a positive note. This in turn should lead to a stronger Pound and, because many machines and consumables are imported, printers should be able to enjoy lower costs and hopefully improved margins.

The UK commercial print industry has also seen radical change in 2017 with the rise in the number of trade printers purchasing large SRA1 and B1 eight or ten colour presses. These eight-up machines, equipped with modern drying systems, utilising LED-UV and other derivatives, are capable of delivering sixteen pages of completely dry print, at 12,000 to 16,000 sheets per hour.

I am hoping 2018 will at least bring a definitive divorce bill, then negotiations with our EU partners can move forward on a positive note

We are now seeing digital printers opting for this new generation of litho because they can now deliver the highest quality of dry print at the lowest cost on the floor. And with no dot gain or powder spray, the job can be sent directly to finishing and delivered to the customer the same day.

The small B3 and B2 printer, with traditional litho, cannot compete and is forced into low cost digital equipment.

This effect can also be seen at print shows, where it was traditional to see equipment suppliers touting their products. These booths have now been joined by the trade printer, sending out the message, ‘don’t purchase equipment—send your work to us and we will deliver it directly to your customers with your identity’. This is in danger of echoing the Cornish fisherman trying to compete with the super trawler. Where will it all end?

Radical change
Bernard Cassidy, marketing manager, production print, Konica Minolta

The business of printing is changing faster than ever. Printers are facing intense margin pressure and fierce competition from the rising number of online print vendors. Info Trends expects the number of jobs that originate online to accelerate at a slower pace over the next two years, likely reaching levels in the range of 40 percent to 50 percent of total print volume.

Print for profit markets are changing radically. Print buyers are looking for a new breed of print-service-provider (PSP) which can connect directly with customers 24/7 and deliver new personalised applications and services across a wider range of communication channels. Turnaround times are measured in hours not days, customers are demanding shorter runs, and the volume of individual jobs to be processed is increasing exponentially.

Traditional printed products are in decline. Printers recognise that they have to become strategic partners with their clients and part of this process is to eliminate barriers and make the printing process more efficient and customer-centric.

Printers are facing intense margin pressure and fierce competition

According to Info Trends’ research, most PSPs are focused on reducing costs and improving efficiency. Many have adopted total automation and optimisation of workflows in the production printing environment. Since 2012, the total volume of work that is produced in a 100 percent automated workflow has basically doubled every two years.
The economic picture for print in 2018 is a positive one. Info Trends believes that overall digital print volumes in Western Europe will increase by 3.6 percent through 2021, but some applications are expected to surpass that growth rate quite noticeably.

We see industrial inkjet and label printing as the areas filled with the most opportunities for PSPs. In particular, marketing automation, software, and crossmedia services have the potential to take print applications on to a new level and there is a huge opportunity for PSPs to leverage the full benefits of the MGI Industrial products within our current portfolio. There are also many new and emerging opportunities in corrugated and folding carton package printing.

Embracing all technologies
Bryan Godwyn, managing director, Intelligent Finishing Systems

There will always be winners and losers in any given year, but the trend for sure in 2017 has been one of continued polarisation. The big guys have remained strong, continued to invest and develop their sales platforms and systems, and the small guys have stayed small and niche.

The businesses in the middle are the ones who have to make some serious decisions. Litho is still a massively important sector for print and will remain so, but it has been under real pressure from digital and will continue to due to the cost of investment and skill sets needed to run such presses. Yet digital is really a commercially viable option now and printers stuck in the B2/B3 traditional market have had to make decisions about which way to go. Both have huge pluses and minuses and the investments are significant.

Most printing houses now of course have both digital and litho and this brings advantages, but pressures as well—pressures on space, overheads, and the skill sets needed.

The businesses in the middle are the ones who have to make some serious decisions

The outlook for 2018 remains strong and stable. The economy is solid. The Pound is more stable and demand for print, books, and direct mail is returning. People are embracing both digital (e-books) and printed books.

With the use of database information more relevant GDPR compliant data can be gathered. This means it is more targeted and people will read and respond to it as long as they feel it is well written and has a point. The clever printer is now using this technology and making its message so much more targeted. The result is higher response rates and more easily justifiable payback.

The saying that the printer is the marketing arm of his customer has never been truer than it is now. Printers are not calling themselves printers and are now embracing all technologies available to them. Bringing as many processes in-house as possible remains a key requirement for the print sector. The mantra is keep control, keep margins, and maintain customer service and retention.

Print is a massively important, exciting, and fast-moving industry. 2018 will bring challenges, both political and economic, but the entrepreneurs within our industry will seize every opportunity and succeed.

A world of opportunity
Stuart Rising, head of commercial printing, Canon UK

I am proud to be part of an organisation that not only is in constant contact with the printing industry, but also ensures that its technology and services meet modern-day requirements. Customers want to uncover new revenue streams, improve their margins, and make the most of their equipment.

Since taking on my new role last summer, I have spent a lot of time visiting customers across numerous markets including general printing, transactional, and direct mail. Their feedback echoes our view: there is real confidence in the marketplace and a bright economic picture for print in 2018, despite what people might term ‘distractions’, such as Brexit.

Looking ahead to 2018, we believe that the opportunities will increase, as the needs of our customers and their customers continue to evolve. We provide business advice and support programmes such as the Canon Essential Business Builder Programme. It is a perfect illustration of our commitment to delivering a strategic approach to the market where we work closely to help our customers build business opportunities. It is a journey.

They do not just want to buy a machine, they want to be part of a development strategy in a real partnership approach

The pace of change in our industry is fast. However, we continue to bring bold and disruptive ideas to life. There are still many avenues for growth in the print industry. One for certain is inkjet, especially for emerging technologies, particularly when they complement toner solutions.

We are seeing organisations looking to reduce their overall labour costs benefiting from the flexibility of inkjet. In graphic arts there is the desire to make use of our Canon Vario Print i200 and i300 cut-sheet production systems for white paper solutions, making the best use of short-run and variable data capabilities when using digital.

The Océ Pro Stream series—a new breed of fast, high-productivity continuous feed inkjet presses combining the vibrant colours of offset with the variable-data versatility of digital printing—also provides major advantages for our customers, especially with our new inks.

In 2018 and beyond, there is a world of opportunity for our customers. Systems, that enable shorter print runs, just-in-time print delivery and personalised cost-effectiveness—all with greater cost-effectiveness—will continue to grow in importance.

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