WidthWise 2011

THE FOURTH ANNUAL SURVEY AND REPORT ON THE STATE OF THE UK/IRISH WIDE-FORMAT PRINT SECTOR

2011

Supporting the UK and Ireland wide-format market, our sponsors: An

Image REPORTS Publication

2011 WELCOME TO WIDTHWISE 2011 Hello and welcome to this, the fourth annual Image Reports Widthwise Report which, based on data and comment collected from over 200 UK and Ireland print companies involved in wide-format print, is the most sector and regional specific publication of its type.

Via Widthwise survey feedback collated this spring, face-to-face and telephone interviews, this 2011 Widthwise Report takes a nitty-gritty look at the overall state of the large-format market and from the perspective of small (turnover up to £500,000), medium (up to £2m) and large (£2m+) print companies so that you can best judge your levels of success with like-sized competition and plan for strategic development.

The Widthwise Survey data, provided by wide-format players of all shapes and sizes, has been compiled by graphic arts market research and strategic consulting company InfoTrends into a series of easy-to-digest graphics that are presented in this report alongside associated features by Images Reports.

You can download a digital version of this report from the Image Reports website at www.imagereportsmag.co.uk. If you have any comments to make on the report there is an opportunity for you to do that online too.

Contents 04 STRATEGIC OVERVIEW Key findings of the 2011 Widthwise survey.

12 STATE OF PLAY We look at how companies are performing and moving forward across three turnover brackets: up to £500k, £500K-£2m, £2m+. Includes a case study on a company in each bracket.

33 SECRETS OF SUCCESS Grassroots LFP players provide their insights into performing well in today’s market.

34 SUPPLIERS’ VIEWPOINTS How do the vendors see the marketplace and challenges for the future?

38 SUSTAINABILITY Why we need to be taking the issue more seriously.

42 HOW GOOD IS YOUR COMPANY? Exploring the characteristics of enduring businesses.

46 THE LAST WORD …goes to Paula Evans, at Manchester-based Transport Media who discusses what digital wide-format print has bought to the out-of-home advertising market.

Lesley Simpson Editor, Image Reports magazine lesley.simpson@imagereportsmag.co.uk

thanks to our sponsors:

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St. John Patrick Publishers Ltd, 6 Laurence Pountney Hill London, EC4Y OBL Tel: 020 7923 8999 Fax: 020 7923 8998 www.imagereportsmag.co.uk chrisc@stjohnpatrick.com

Editor: LESLEY SIMPSON lesley.simpson@imagereportsmag.co.uk Publishing Director: CHRIS COOKE chrisc@stjohnpatrick.com Design: TANIA KING

WIDTHWISE 2011

Overview and

key findings

O

ver 200 companies involved in large-format print from across England, Scotland, Wales and Ireland responded to the 2011

Widthwise Survey which was carried out this spring.

This is the fourth consecutive year that Image Reports

10 BITES OF DATA 71% of those for whom large-format is not 100% of their business expect to see the ratio of large-format work increase in the next two years.

has conducted the poll, which covers business, markets and technology issues. During the last four-year period, the large-format industry has been revolutionised by technology and economic turmoil. Since that shake-out, the pace of change hasn’t slowed but that change is typically more incremental than transformational. The 2010 Widthwise report explored what wide-format

48% said margins in wide-format are better than in other parts of their print business.

25% said overall margins have improved in 2010/11, while 45% said they had deteriorated 51% ranked the general economy as their most major concern

players needed to do to be at the leading competitive edge, by looking at the need for diversification and the

54% plan to recruit in the next two years.

growth of growth vertical markets. This 2011 survey/ report goes a step further and takes a more nitty-gritty look at the state of a still unpredictable market from the perspective of small (turnover up to £500,000), medium (up to £2m) and large (£2m+) print companies so that

66% said entering new markets/offering new services was a high or very high priority 46% are making strategic change to win business from new applications/niches

they can better judge their levels of success with likesized competition and develop their strategy accordingly

56% expect to buy a new large-format printer in the next two years

In terms of turnover, number of employees and company location, the overall demographics of the 2011

44% will invest in design software in the next two years

survey sample was much the same as in 2010 – but slightly more respondents this time around said wideformat print accounts for 80 – 100% of their business

59% think it is more important to offer ‘green’ solutions than it was two years ago, while 18% think it’s not important at all

(23% opposed to 15% in 2010). Of those that said it is not 100% of their business a whopping 71% expect to see the ratio of such work to increase in the next two years. And that’s because, as the survey makes clear, there’s still good money in wide-format.

By far the biggest concern was the state of the general

A quarter of all those polled said overall margins have

economy, with 59.1% ranking that as their top worry

improved in 2010/11. Less encouragingly, 45% said they

while 28% ranked price competition as their biggest

had got tighter (the other 30% said no change). Of those

concern. Fewer than a fifth of respondents placed the

with turnovers of £2m+ only 15% saw margins increase in

availability/cost of finance as the most serious challenge

the period while the figure jumped to 27% and 28%

they faced and foreign competition didn’t seem to

respectively in the small and medium turnover segments.

particularly worry respondents.

So, are the smaller companies better positioned in terms of flexibility and readier to try alternative, higher margin work?

Almost half of those polled (48%) said margins in wide-

04

those in the middle turnover bracket said that.

Despite the still shaky general economic situation, over half of those polled (54%) said they plan to recruit in the next two years, a figure that jumps to 64% for medium-

format are better than in other parts of their print

sized businesses. Print production comes top of the new

business. This encouraging news was pretty consistent

blood wish list, with 62% of those looking to recruit citing

whatever the size of turnover. Yet one in five large and

this as a priority, followed by sales and marketing (36%),

small companies reported that margins were not so

design (30%) and finishing (26%). Only 7% flagged up the

strong as in other parts of the business. Only a tenth of

need for more people to handle business development.

WIDTHWISE 2011

basic demographics Geographic Location

Size by Total Turnover

Scotland – 4% Wales – 5%

£2+ – 20.4%

Ireland – 6% North-west England – 9% South-east England – 40%

Up to £500,000 – 52.6%

North-east England – 9%

£500,000 - 2m – 27%

South-west England – 10% Midlands – 17%

Number of Employees

% of turnover in wide format?

51-100 employees – 4%

40-60% – 12%

100 employees – 8% 21-50 employees – 9%

60-80% – 13% Under 20% – 32% 1-10 employees – 64%

11-20 employees – 15% 20-40% – 20% 80-100% – 23%

Business Have your overall margins improved in 2010/2011?

Do you plan to recruit in the next 2 years?

Yes – 25%

Not sure – 23%

No – 45% Yes – 54% No change – 30% No – 23%

What are your major concerns for business in 2011/12 (rank 1 – 7, 7 being most important) – Average rating, all respondents Are your wide-format margins better than other parts of your print business?

6 5.2%

5 No – 18%

4 3 Yes – 48%

4.62% 3.29%

3.61% 3.09% 2.34%

2

About equal – 34%

1

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of Av th ai e lib ec ilit of on y ne / om co w y st en of tra fin nt an s in ce to th e m Pr ar ic ke e Re t c cr om ui F pe or tin ei g tit gn io st af n co fw m ith pe th tit e io rig n ht sk ill se ts

0

05

WIDTHWISE 2011

The industry is clearly still adjusting to the seismic changes wreaked by technology and recession. Almost

Business

half (46%) of the respondents said they are having to make strategic changes within their operation to win business from new applications/niches – but this is considerably less than the 70% who said the same thing in 2010, suggesting that much strategic change has

Where are you primarily looking to recruit? (tick all relevant)

already taken place.

80%

A key strategic focus remains finding new markets and

70%

a focus at all.

Unsurprisingly, almost three quarters (72.7%) of companies are involved in poster printing, with exhibition and display graphics (69.9%), general banners/flags/signage (65.7%) following close behind.

But there are areas where the percentage of printers

50% 40% 26%

20%

15% 9%

10%

7% 2%

0%

6%

5%

1%

Pr ep

re ss

/

file

garments (8.3%), packaging (14.8%), industrial speciality cardboard engineering (16.7%).

36% 30%

30%

involved is still relatively low: in textile printing for (15.7%), textiles for home/interiors (17.7%) and

62%

60%

D m an esi ip gn Pr u in t p lat io ro du n ct i Sa Fin on le s i s / hi m ng a Bu M rke sin t a i es na ng s de gm ve en lo In A pm t te d rn m en et Ge in n t ist / ra on era tio lI lin T n e s de up ve po r lo pm t en t O th er

a high or very high priority, with only 6% saying it wasn’t

% of respondants

offering new services: 66% of respondents said this was

Perhaps that’s because there’s still enough perceived growth in some of the mainstream markets. Over 22%

How high a priority is finding/entering new wideformat markets/offering new services?

said exhibition and display graphics is the fastest growing sector for their businesses, with almost 20% saying the same about general banners/flags/signage.

With architects becoming more central to print

Not a focus at all – 6% Low – 6%

purchasing, it will be interesting to see how their demands play out. In the 2010 Widthwise Report only 2%

High – 39%

Medium – 22%

of work was said to come from architects. This time around it is nearer 8%.

Getting more involved with clients at an early stage in

Very high – 27%

graphics projects is certainly a growing trend. Almost half (49%) of those surveyed now offer a creative design service, and over a quarter (25.5%) have a total project management capability.

Which market areas are you looking at becoming involved in over the next 2 years?

To maintain the search for new business, especially from new applications and niche markets, print companies are involving creative teams earlier in projects, but the survey clearly shows that the restructuring/refocusing of sales and marketing teams is by far the most urgent priority. Many companies were also researching potential new markets and working more closely with suppliers to identify new opportunities.

Textiles must certainly be one of those opportunities.

Only 6% of respondents said they own a textile printer and a mere 8% said they intend to buy one anytime soon even though 56% of respondents having said they intend to buy a new large-format printer of some sort in the next two years.

Over half (55.1%) of the companies surveyed said they

Exhibition and display graphics

19.4%

Retail / POP / POS

15.7%

General banners / flags / signage

14.4%

Wall murals

12.5%

Textile printing for home / interior décor

11.1%

Fine art / photography

9.7%

Textile printing for banner / flags

9.3%

Floor graphics

9.3%

Posters

8.8%

Window graphics

8.8%

Transport grphics

7.9%

Industrial speciality (ceramics, metals etc)

7.9%

Billboard / outdoor advertising

6.9%

Cardboard engineering

6.5%

Building hoardings / wraps

6.5%

Other

4.2%

Textile printing for garments

3.2%

Packaging

2.8%

own a solvent (inc. eco-solvent) printer and 27% of those

06

0%

5%

10%

15%

20%

WIDTHWISE 2011

Which of these is the fastest growing for your business?

Where are you primarily looking to recruit?

Posters Exhibition and display graphics General banners / flags / signage Retail / POP / POS Window graphics Fine art / photography Wall murals Transport graphics Floor graphics Billboard / outdoor advertising Textile printing for banner / flags Building hoardings / wraps Cardboard engineering Textile printing for home / interior décor Industrial speciality (ceramics, metals etc) Packaging Textile printing for garments Other

Exhibition and display graphics General banners / flags / signage Retail / POP / POS Fine art / photography Posters Transport graphics Window graphics Wall murals Building hoardings / wraps Billboard / outdoor advertising Cardboard engineering Textile printing for home / interior décor Industrial speciality (ceramics, metals etc) Floor graphics Packaging Textile printing for banner / flags Other Textile printing for garments

72.7% 69.9% 65.7% 59.3% 57.9% 42.6% 42.1% 42.7% 35.6% 31.0% 26.4% 24.1% 16.7% 15.7% 15.7% 14.8% 8.3% 4.6%

0%

22.2% 19.9% 13% 12% 10.6% 9.7% 8.8% 7.4% 6% 4.6% 4.6% 3.7% 3.2% 2.8% 1.9% 1.9% 1.9% 1.4%

0%

5%

10%

15%

20%

25%

10% 20% 30% 40% 50% 60% 70% 80%

If wide-format is not 100% of your business, do you expect to see the ratio of wide-format to increase in the next 2 years?

Through which channels does your work come?

Other – 0.6%

Down – 4%

Architect – 7.9% Print management – 9.7% Direct from end client – 33.7%

Consumer – 13.6%

Static – 25% Up – 71%

Agency – 16.6% Trade work (from another printer) – 17.8%

Are your wide-format margins better than other parts of your print business?

Which added-value services do you offer?

100

% of respondants

80 60

Creative design 32%

20%

49%

Total project management

31%

25.5%

40% 22%

10%

About equal

Variable data printing / versioning

9.4%

Web-to-print

2.7%

Website building / content creation

2.7%

Database hosting / managing / cleansing

1.3%

No

40 20

Yes 48%

50%

47%

Other

0

Up to £500,000

£500,000 - £2m

4%

£2m+

0%

10% 20% 30% 40% 50%

What are you having to do to win business from new applications/market niches?

Restructure / refocus sales / marketing teams

55.2%

Attend seminars / reasearch new markets

54.5%

Work more closely with suppliers to identify / sell

52.7%

Realign your branding / company name / website

46.7%

Involve in-house creative team earlier in projects

26.7%

Spend more time on applications R&D

25.8%

Buy in databases (for maketing purposes)

17.6%

Appoint a ‘new business tsar’ / business

16.5%

Recruit people with specific new sector knowledge

14%

Other

2.1%

0% 10% 20% 30% 40% 50% 60%

Are you having to make strategic changes within your business to win business from new markets/applications?

Yes – 46%

No – 54%

07

WIDTHWISE 2011

investing in a new large format printer expect to buy one of these machines. But UV is where it’s at. Almost half

technology

(48.2%) of those polled said they now own a UV curable printer of some description. 49% of those investing in

What type of wide-format equipment do you own

new kit said they will buy a UV machine – 33% plumping for a flatbed.

Latex printers are also enjoying a surge in demand. In a relatively short time they have made a significant impact, with 6.5% of surveyed companies owning a latex printer and 15% of those planning printer investment over the next two years having earmarked a latex unit.

Asked if they were expecting to invest more across their businesses in 2011/12 than in 2010/11, 41% of respondents said they were - pretty much on par with the

Finishing - laminator

57.4%

Finishing - straight line cutter

27.3%

Finishing - contour cutter

29.6%

Print-and-cut roll-fed printer

21.8%

Textile printer

9.3%

UV curable roll-fed printer

9.7%

UV curable hybrid printer

13%

UV curable flatbed printer

25.5%

Solvent printer (inc. eco-solvent)

55.1%

percentage that said they would be spending about the same (only 17% said less). In terms of large-format

6%

Dye sublimation (non textile)

Latex printer

6.5%

Aqueous printer

30.6%

investment, 38% said they would be spending less that £20,000 while 4% plan to pump in more that £25,000.

0% 10% 20% 30% 40% 50% 60%

Apart from spending on new printing machines, design software was the most commonly identified large-format investment area with 44.6% saying they will be buying

Do you own other types of printer?

such packages. Laminators (18.8%) and contour cutters Other

1.9%

Screen

6.9%

plenty of potential there. Asked what they wanted their

Litho press

3.7%

suppliers to focus their R&D on, printers said reducing

Flexo

0.5%

Digital press - inkjet

12%

(16.1%) came in next. Only a tiny minority plan to buy into VDP (0.9%) or W2P (1.8%) software, so there is still

machine running costs was the top priority.

On the issue of the environment the picture remains

Digital printer - toner

31.5%

confused. While a walloping 59% of those polled said 0%

offering ‘green’ options is more important that it was two

5% 10% 15% 20% 25% 30% 35%

years ago, a significant 18% thought it not important to do so at all and 9% thought it less important that it was two years ago!

Are you expecting to invest more in 2011/12 than in 2010/11?

A much bigger percentage of print companies in the top turnover bracket of £2m+ (more likely to work with

Less – 17%

the bigger, more environmentally savvy retail clients) thought it increasingly important than their smaller counterparts. 26% of those companies with a turnover of

About the same – 42%

less than £500,000 actually felt green issues were

More – 41%

unimportant. Customers seem equally confused: only 4% of printers said that ‘most’ of their clients asked for environmental accreditation, while 63% said the question has not arisen.

On the evidence of this survey, the large-format

Do you expect to invest in a new wide-format printer in the next 2 years?

industry is still in transition. Yet given the shocks it has experienced since 2007, the most striking aspect of the

No – 18%

results in the 2011 Widthwise survey is the industry’s sheer, bloody-minded resilience. In the middle of great economic uncertainty, most printers – small medium and large – seem to be making the strategic adjustments, planning the investments and exploring the valuable new niches that will help them flourish in the long run.

08

Yes – 56% Not sure – 26%

WIDTHWISE 2011

Which type of printer do you expect to buy?

What technologies did you primarily operate when you first bought into inkjet WF?

33%

35% 30%

27%

Pre-press/repro – 10.9%

25% 20%

Screen – 11.6%

15%

15%

Sign making – 24.5%

9%

10%

9%

5%

7%

8% 5%

Other – 19%

Photo lab – 15%

pr rin in La te te te r( r UV x in pr c cu .e in te co ra r bl -s UV e ol fla ve cu tb nt ra ) ed bl UV pr e hy cu in te D br ra ye r id bl su e pr ro bl i n ll-f im te ed r at io pr n in (n te on r te x Te ti l e) xt ile pr in te r

0%

So lv en

tp

A qu eo us

Litho – 19%

Do you expect to invest in any of the following for wide-format in the next 2 years?

Other

1.8%

Software – VDP

0.9%

Software – W2P

1.8%

Software – design

44.6%

Software – workflow / MIS

10.7%

Finishing – straight line cutter

5.4%

Finishing – laminator

18.8%

Finishing – contour cutter

16.1%

0%

Where would you like to see manufacturers putting their R&D

Machine / consumables reliability / consistency

3.59

Profiling / workflow

3.05

Cutting machine running costs

4.22

Cutting kit capital investment cost

3.55

Improving quality / speed

3.92

10% 20% 30% 40% 50%

In total, how much do you expect to invest in wide-format process over the next 2 years?

0

1

2

3

4

5

What is the biggest technological issue you face?

3.0

£250,000+ – 4%

2.53

2.5

£150,000 - £250,000 – 7%

2.69

2.51 2.15

2.0

£75,000 - £150,000 – 16% Less than £20,000 – 38%

1.5 1.0 0.5

£20,000 - £75,000 – 35%

w

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In the last year – 5%

um

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When did your company buy its first inkjet wide-format printer?

es

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0.0

1-3 years ago – 17%

Over 5 years ago – 61% 3-5 years ago – 17%

09

WIDTHWISE 2011

State of play: For companies with a turnover of £2m+

D

oes size matter? This is yet another issue

business from wide-format print and only one in seven said

economists can’t quite agree on. The theory

this sector accounted for 80% or more of their sales.

is clear: as companies grow larger their

Servicing significant, demanding customers in the retail

average total cost of production should decline and give

industry, many large digital print groups strive to offer a

them the edge over smaller rivals. Yet diseconomies of

diverse a mix of services and products. That said, with 77%

scale – larger overheads, wider distribution networks, lack

of larger firms expecting wide-format to supply more of

of flexibility – may blunt this edge. And with markets

their turnover, this option is clearly increasingly favoured by

volatile in a downturn, larger players can find it harder to

their customers. With 49% of larger print companies

generate the volume they need to keep their average total

already having environmental accreditation – compared to

cost of production competitively low. The one industry

18% across the industry – sustainability is not a trend on

where size usually does equate to longevity is organised

the horizon but a reality of business life.

crime but the mafia, which has its own particularly

If you accept, as a rule of thumb, that larger print

effective way of maintaining its competitive edge and

companies tend to serve larger customers, this might

dispensing with failed managers, is not that relevant a role

explain why margins were under significantly more pressure

model for most large businesses.

among the wide-format industry’s biggest players. Only

Yet in a market revolutionised by economic catastrophe and rapidly evolving technology, wide-format printing businesses with sales of £2m have held up pretty well. In the 2008 Widthwise Survey, 22 of the respondents revealed that they had turnovers of £2m or over. Today, 19 are recognisably the same business, one has gone into liquidation and two have been acquired –Lauren Displays by a creative agency and Multigraphics by the multinational packaging group DS Smith. Given the carnage that has transformed so many other sectors of the printing industry over the same period, such endurance is impressive.

That doesn’t mean large companies have had it easy. Far from it. And the 2011 survey suggests they still face significant challenges but it says something about their performance that their biggest worry by far is probably the

15% said their margins had improved in the past year – compared to an industry norm of 25% – while 42% said

“

THE MAFIA, WHICH

HAS ITS OWN PARTICULARLY EFFECTIVE WAY OF MAINTAINING ITS COMPETITIVE EDGE, IS NOT THAT RELEVANT A ROLE MODEL FOR MOST LARGE BUSINESSES

outlook for the UK economy. Yet even though the

”

economic outlook is as unpredictable as the weather

they had deteriorated. This suggests that some larger print

forecast, some of the biggest printers have decided to

firms have been under pressure to sacrifice margins to

invest (as the Evolve Group has done), revitalise their

maintain volume. Fierce competition has probably taken its

image (Gardners) and experiment with 3D print (the

toll too: this was the second greatest concern for large print

Simpson group).

firms.

The pressure does not seem to have significantly dented

BUSINESS

business confidence or distracted many managing

In 2011, for the first time, the results of the Image Reports

directors from investing in the future. More than six out of

Widthwise survey are broken down by size of business.

ten larger firms plan to recruit in the next two years and

While the responses show a fair degree of consensus

they are looking to hire in three particular areas: print

across the industry, there are some important differences –

production (where 57.6% of respondents planned to

especially for larger companies.

recruit), finishing (39.4%) and sales/marketing (39.4%). The

For a start, more than two out of three companies with sales of £2m or more generated 40% or less of their

12

quest for new sales/marketing staff is reinforced by the fact that 60% of larger firms say they will restructure or refocus

WIDTHWISE 2011

Have your overall margins improved in 2010/2011?

120

their sales/marketing teams to explore new applications and new niche markets. Just over half wanted to make strategic changes, with 53% hoping to closer collaboration with suppliers would help them explore new applications.

Traditionally, printers’ marketing campaigns have

% of respondants

100% 80%

28%

27%

No

60% 40% 20% 0%

No change

42%

Yes

45%

46%

42% 27%

28%

Up to £500,000

£500,000 - 2m

15% £2m+

resembled showbiz marriages: short-lived, entered into more in hope than belief and doomed by unrealistic expectations. But the bigger large-format What are your major concerns for business in 2011/12 (rank 1-7, 7 being the most important).

not the electronic husks of yore. Last November,

6

Meanwhile, the Simpsons Group has launched what

3

it calls an ‘Influence Academy” to inform potential

2

customers while Augustus Martin has launched a

1

range of customer-driven consultancy services from In an industry driven by digital technology, the fact that so few companies made adequate use of the

MARKET ANALYSIS Wide-format may have been the fastest growing sector of the printing industry for at least a decade now but things aren’t what they used to be – and probably never were as good as we now think they were. Though business has stabilised, the marketplace is still tough.

The list of applications the largest wide-format firms serve will startle no one. The most popular are exhibition and display graphics (62.8% of respondents were in this sector); posters, retail POP/POS (both 55.8%); banners/flags/signage (53.8%) and window graphics (46.5%). Probably he biggest surprise was that 34.9% were involved in cardboard engineering – compared to 16.7% for the

G

m ou

practice.

A

but it does signify a shift towards some kind of best

en e

internet was baffling, if not plain weird. What firms

ra nt A l st of va ate ne ila o w bili f th en ty e Re tra / c ec cr nt os on ui s t o om in tin f P to fin e g st F ric th an y af or e e f w ei co m ce ith gn m ark th co pa et e m ris rig pe on ht tit sk ion ill se ts

0

store audits to market research.

are doing now might not be radical or transformative

3.06

4

4.94

Clark engages with potential customers with a blog.

3

5

makeover its image, including its website. McKenzie

3.6

Gardners hired brand design agency Stills to

5.65

word. Their websites are now usefully informative,

3.47

printers have recognised their need to spread the

Applications for larger firms (% of respondents involved in each sector) Posters Exhibition and display graphics General banners / flags / signage Retail / POP / POS

55.8% 62.8% 53.5% 55.8%

Window graphics Fine art / photography

46.5% 18.6%

Wall murals Transport graphics Floor graphics Billboard / outdoor advertising Textile printing for banner / flags Building hoardings / wraps Cardboard engineering Textile printing for home / interior décor Industrial speciality (ceramics, metals etc) Packaging Textile printing for garments Other

37.2% 27.9% 41.9% 23.3% 25.6% 23.3% 34.9% 14% 14% 14% 2.3% 4.7%

industry as a whole. The responses suggested that many larger printers had taken the strategic choice

0%

10% 20% 30% 40% 50% 60% 70% 80%

to focus on fewer markets but offer a more complete service within those sectors: four out of ten offered

13

WIDTHWISE 2011

total project management, 32% creative design and 16%

said, you only have to look at the history of the digital

variable data printing/versioning. A small minority – 4% –

transformation of print to see the dangers ahead.

already offer Web-to-print services.

Despite the scale of these businesses, foreign competition does not yet register as a significant worry.

customers will regard print as a commodity. The time to

That may change. It’s worth noting that Augustus Martin

educate the market is now – especially as many printers

has founded POP European Network, an alliance of the

now believe that many of the people who are responsible

largest POP firms in the major European markets. By

for procuring print don’t necessarily understand what

offering a standardised pan-European approach and

they’re buying. This will be especially important as pre-

increased print power, Augustus Martin and its partners say

press companies, photographic houses and screen printers

they can reduce the time to market. Given that so many

all seek to diversify into a market that is relatively vibrant

wide-format customers are multinational, you can certainly

and lucrative.

see the logic. A similar rationale may be behind

For larger printers, the imperative is to ensure their

Papergraphics’ acquisition of Dutch firm Quality Graphics

customers realise the value – financial and strategic – of

last November.

their expertise. This need may explain why a third of larger

And then there is China. With a billion people, the world’s

firms in this survey are looking to appoint a business

second largest economy has an insatiable appetite for

development manager and give their creative teams more

signage. And the Chinese wide-format industry, which is

timely involvement in projects while 40% plan to realign

still relatively unsophisticated in terms of quality and

their brand/image/website.

services, is full of young entrepreneurs who don’t have vast

Larger firms haven’t stopped looking for new markets –

experience in running a business. So Chinese wide-format

though only 22.6% said it was a very high priority – but

printers should be pretty busy keeping up with domestic

some managing directors have clearly decided it’s more

demand for a while yet. (As indeed will Indian companies as

important to look at the markets they are serve them well

wide-format grows exponentially there.) But the long-term

and serve them a lot better.

“

TECHNOLOGICAL OUTLOOK

PRINTERS’

Companies with a turnover of £2m or more were slightly

MARKETING CAMPAIGNS

bullish about investment than their smaller rivals: half said

HAVE RESEMBLED

70% expected to invest in a wide-format printer in the

SHOWBIZ MARRIAGES:

they would spend more in 2011/2012 than in 2010/11 and next two years.

They weren’t just eyeing up new printers: 36% expected

SHORT-LIVED, ENTERED

to buy design software, 23% in contour cutters for

INTO MORE IN HOPE THAN

workflow or generate management information. One in 20

”

BELIEF

finishing, 14% in laminators and software to handle expected to invest in variable data printing software, something no smaller companies were planning to do.

The length of this shopping list is reflected in the fact

threat – it could be as soon as ten years from now – posed

that 19% planned to invest £250,000 or more in the next

by these emerging powers should spur British businesses

to years, with another 14% expecting to invest between

to make greater efforts to differentiate themselves.

£150,000-250,000. Maybe one of the enduring economies

Digital technology has simplified the media. The

of scale is the ability to spend more on the latest

impenetrable processes that used to frustrate, baffle and

technology than their smaller rivals. (That said, it is

constrain customers – and justify the printing industry’s

striking that over one in four say they plan to invest less

fees – have been bypassed. Customers now consume

than £20,000 in the next two years.)

media in a completely different way and, interacting

14

Once choosing print begins to seem as simple as downloading a track from iTunes, there is a danger that

If you look at what kind of printer larger firms expect to

through digital channels, take a do-it-yourself approach to

invest in, that would certainly seem to be the case. Very

the media that has created many new print markets. That

nearly two out of three say they will buy a UV printer of

WIDTHWISE 2011

firms weren’t that much from different from the

problem remains machine reliability. In the past,

/ Pr epr es s

quality/speed, lower running costs and their biggest

18.2%

file

industry as a whole. They would like better

0%

0

Asked what they wanted from the suppliers, larger

9.1%

10

be plumping en masse for UV.

9.1%

20

machine five years ago or more – and they seem to

6.1%

30

technology – three out of four bought their first inkjet

0%

take a risk, have traditionally been early adopters of

39.4%

40

39.4%

(10.0%). The larger firms, who have the resource to

18.2%

50

printers, solvent printers (13.3%) and latex printers

18.2%

60

flatbed printer. The other priorities are textile

m a D Pr ni esig in pu n t p la ro tio du n Sa ct le i s Fin on / i s Bu m hin sin g M ar es a ket na in s d In ev gm g te e rn A el et G dm opm nt / en i n on er is en lin al tra t ti e IT de su on ve pp lo or pm t en O t th er

some kind – and 46.7% are opting for a UV curable

57.6%

Big firms recruitment targets (% of respondents looking to recruit in each area)

some larger firms have also complained that their different suppliers – of substrates, ink and machines – don’t collaborate or communicate effectively.

THE LAST WORD

Planned printer purchases (% of large companies expecting to buy)

The wide-format industry has seen so much change in the last four years it’s easy to overlook the industry equivalent of Sherlock Holmes’s dog that didn’t bark in the night. There haven’t been many

Textile printer UV curable roll-fed printer

acquisitions by larger print and packaging groups

UV curable hybrid printer

seeking to diversify into this market in the UK. The most notable deals are quite old now: St Ives

13.3%

Dye sublimation (non textile) 0% 10% 6.7%

UV curable flatbed printer

46.7%

Solvent printer (inc. eco-solvent)

13.3%

Latex printer

purchase of Service Graphics in 2006 and DS

10%

Aqueous printer 0%

Smith’s takeover of Multigraphics three years ago.

There has been plenty of consolidation and strategic

0%

10%

20%

30%

40%

50%

realignment among suppliers, but not that much really among print companies.

In part, this may reflect the commercial print industry’s own financial troubles as the economic crisis wreaked havoc. But as the recovery gathers momentum, and banks become more amenable to financing such deals, some opportunistic or strategic

In total, how much do you expect to invest in wide-format process over the next 2 years? (includes software and hardware)

acquisitions would seem likely.

Wide-format is no longer a niche market. If you

100%

0% 7%

needed any confirmation of that, consider two decisions the St Ives group has made this year. At the end of January, the group relocated its large-

80%

36%

1%

2% 12%

£250,000+ 29%

60%

idea that wide-format would be more important to a group as large as St Ives than magazine printing would have seemed absurd. There is no more

£150,000 - £250,000 £75,000 - £150,000 £20,000 - £75,000 Less tahn £20,000

40%

sold off its magazine business. Five years ago, the

14% 19%

format division, Service Graphics, to massive new premises in Chessington. Six weeks later, the group

19%

45%

19%

56%

20% 0%

28% 12% Up to £500,000 £500,000 - £2m

£2m+

compelling proof of the seismic shift which wideformat has triggered in the printing industry.

15

WIDTHWISE 2011

State of play: Case Study

A show of strength

N

ow divested of its magazine print business,

London, the Chessington production supersite will

St Ives Group is evolving into two distinct

support the company’s other operations. It is where the

parts: print and marketing services - the

greatest efficiencies are being made and where Scott

latter still in its infancy and contributing just 2% to group sales of £149m sales for the six months ending January

“Customers come here and it’s immediately apparent

2011. Of the other 98% its large-format display

that we’re serious players and proactive in the market,”

company Service Graphics (running under the division

enthuses King, “and we’re holding Open Days in June

heading Exhibitions and Events) accounted for the

for designers and creatives to see what we’re all about

smallest proportion of sales at 11% (Point of Sale 31%,

etc. In the past Service Graphics was a bit of a sleeping

Books 28%,

giant – it didn’t shout about what it did. A new

Direct

management team headed by Nick Cole was put in

Response and

place a couple of years ago and things began to change.

Commercial

He rejuvenated us. He sits on the St Ives Executive

28%) but chief

Board and that has helped. St Ives recognises that

executive

large-format is a really strong growth sector and without

Patrick Martell

that we wouldn’t be in a new building and have made

has made it

the investment we have.”

clear that he

Since summer 2010 Service Graphics has installed the

anticipates “a

UK’s first superwide Durst Rho 500R roll-to-roll UV

significant

printer, a Rho Tex printer and an Inca £20. “It has been a

increase in

huge investment but one which has brought economic

activity within

efficiencies through higher speeds etc,” says King. “It

this market”

also means we’re in a stronger position to service

and that

customers and offer a wider range of solutions – and

Service

that is what it’s all about.

Graphics,

“We expect to see a strong performance in 2011 and moving forward, but the market remains competitive and

which relocated its head office to Chessington at

in all fairness, we won’t see it get back to what it was – Sales director Scott King expects growth in turnover and profitability

it’s a changed marketplace. We’re seeing spend coming back in exhibitions and events, and retail and interiors

the start of this year, will benefit from the move and a

are growing markets for us. Our new site and new

£4m investment strategy.

technology gives us an advantage because the ability to

Service Graphics’ sales director Scott King says growth is already being seen and is predicting the company will turnover £38-£40m by the year end in July

supply the correct solution, whatever that might be, is what its all about, regardless of which market it’s for.

“Service and quality have always been our mantra and

2011. “We expect to see significant growth and to

now that means expanding the solutions we offer,

become a bigger part of the St Ives Group as time

though print remains key within that solution – and that

moves on, both in terms of turnover and profitability,” he

will remain the case.”

says. “That is largely due to the new site and the new

But the move to Chessington is about more than

technologies we have recently acquired, but we are

production capability: “It has brought a culture change

seeing growth from all our sites in terms of turnover.”

and a new vision which will take us to the next level,”

Service Graphics has bases in Glasgow, Skelmersdale,

16

believes it can woo customers to best effect.

says King. “We’re doing much more about cross-

Nottingham, Kent and Salisbury but it’s the new 4,274m2

fertlisation in the business. Clients want a ‘relationship’

purpose-built factory in Chessington that is the focal

but they are happy to talk to more than one person,

point. Primarily servicing the South of England and

often because the large clients have more than one

WIDTHWISE 2011

A view of the print production area at the new Service Graphics’ Chessington site

person dealing with a job anyway, So it’s quite common

Graphics’ vision. “We’ve seen an upturn in the last 12

for the designer to be talking to a client as well as the

months so we’ve sat down with suppliers and said

account handler etc.

‘Look, this is the journey we’re on’ and they seem happy

“We’re investing a lot in multi-skilling staff. As a large

to come with us.

operation we have to be sure we have the correct

“I would argue that wide-format has been the fastest

knowledge base among the staff to compete with

growing part of print for the last 15 years. We have been

smaller companies where owner/managers are talking to

continually taking new products to market, largely within

clients and have a good overall view of what can be

our existing markets because we think there’s enough

achieved. The aim is to get the whole staff to fully

growth there to do that. However, how we work with

understand the business we work in. The directors all

suppliers has changed. We are true partners now, both

get their hands dirty and sell and manage accounts too.

actively looking for new offerings to take to market.

A new MIS system being installed across the Service

We’re finding that suppliers more readily now come and

Graphics family of sites will help provide the data

talk about R+D possibilities etc. And we have kit people

analysis of various KPIs which can then be passed on to

coming to ask where we think there are gaps in the

the staff. “Communication is crucial to success which is

markets. There’s much more synergy between printers

why we started an internal blog last year,” says King.

and suppliers than in the past.

“It’s important to have all the staff on your wavelength.

“For instance, we open up the sales team to suppliers.

When we were looking at the move to Chessington we

I’ve sent salespeople away for two days at a time to

realised we only had a small corridor in which we could

have a proper dialogue about what can be achieved with

retain staff and that mattered to us. In the end we only

various materials etc. I have eight customer service guys

lost three out of 200 in the move which meant we had a

off to a supplier for three days next week etc.

strong buy-in from the employees and we continually update them on what’s happening in the company.”

King says suppliers have also bought into the Service

“At the end of the day it’s about being in a flexible enough position to a service customers’ changing demands and still make money”.

17

WIDTHWISE 2011

State of play:

For companies with a turnover of £500,000 - £2m

T

he Greek philosopher Aristotle argued that the

two years, compared to 54% across the industry. And only

middle ground was a good place to be. He might

one in seven medium-sized firms says they will definitely not

have changed his mind if he had been born

recruit. There were no great surprises when firms were asked

2,400 years later and been running a wide-format printer with a turnover of more than £500,000 but less than £2m.

Medium-sized businesses do not have the flexibility of smaller, nimbler rivals. One of the downsides of growth is that it tends to create structures and demarcations that

what kind of staff they wanted to recruit: the biggest priorities were print production (a target for 52% of mediumsized firms), sales/marketing (38%), finishing (28%) and online development (18%).

This confidence was also reflected in the finding that firms

didn’t previously exist. If management isn’t vigilant, fixed

with sales of between £500,000 and £2m were slightly more

costs can creep up. Neither do medium-sized firms enjoy the

likely to be planning strategic change (54% compared to an

economies of scale – or easier access to finance – available

industry average of 46%). To win business in new areas or

to big companies. And even though they generate more

with new applications, medium-sized firms were focusing

revenue than smaller rivals, there is precious little margin for

more time and money on R&D (52%), realigning their

error. Every major decision is critical for the business. These

brand/website (35%), and restructuring their sales/marketing

factors may explain why, traditionally, medium-sized printing

teams (33%).

companies have been hit hardest when the industry

Yet medium-sized printers are not being unrealistically

experiences economic turmoil. Yet despite these

bullish. They do have worries – their biggest being price

considerable challenges, four years after the credit crisis,

competition. Like their smaller and larger rivals, they are

medium sized wide-format printers seem – from the findings

concerned about the state of the economy and new entrants

of the 2011 Image Reports Widthwise survey – to be in

into the market. But they are also slightly more worried about

reasonable shape and looking to the future with a degree of

their ability to recruit the right staff.

cautious confidence.

MARKET ANALYSIS STATE OF BUSINESS

Wide-format printing has tended to derive the bulk of its

Profit margins remain the surest indicator of a wide-format

turnover from a few well-known markets: posters, exhibition

printer’s health. And that yardstick suggests medium-sized

and display graphics, general banners/signage and retail.

printers are not doing too badly: 28% said their margins had

They remain the largest sectors for medium-sized printers

improved, while another 28% said they had remained

but the findings suggest these firms are looking a bit further

constant. In this respect, they were performing very slightly

afield for work. They are more likely, for example, to be in

better than the industry as a whole.

wall murals, transport graphics, floor graphics, billboards,

This may partly be explained by the fact that half of the

hoardings/wraps, textile printing for home/interior décor,

format business were better than in the other parts of their

industrial specialty (ceramics, metals etc), and packaging

print business. This was slightly better than for smaller and

than smaller and larger firms. Medium-sized firms were

larger rivals. Only one in ten said their wide-format margins

especially strong, comparatively, in transport graphics,

were worse, compared an industry norm of 18%. From these

building hoardings/wraps, industrial specialty (ceramics,

findings it seems entirely sensible that almost 71% of

metals etc) and packaging.

respondents in this sector expect wide-format printing to

Nor, it would seem, are they content to stop there: 78%

account for a larger slice of their business in the next two

said opening up new markets and offering new services was

years. The relative buoyancy of medium-sized firms may

a high or very high priority, compared to 66% for the industry

have something to do with the fact that they already derive

as a whole. The value-added services medium-sized firms

more of their business from wide-format: 42% said it

already offer tended to fall in three categories: total project

accounted for more than 60% of their revenue.

management (37%), creative design (35%), and variable data

The findings suggest a degree of optimism about the

20

textile printing for banners and flags, building

medium-sized businesses said their margins in their wide-

printing (14%). Yet the most emphatic evidence that

future and this is reflected in their slightly more bullish

medium-sized firms are not content to rest on the laurels is

intentions on recruitment: 64% plan to hire staff in the next

the finding that 52% of them are investing more time in

WIDTHWISE 2011

Are your wide-format margins better than other parts of your print business?

R&D for new applications – compared to 12% for smaller firms and 27% for businesses with sales of £2m or over.

This does seem to contradict conventional wisdom

% of respondants

100 80

32%

60

20%

31%

40%

About equal 10%

22%

50%

47%

No Yes

40 48%

20

which suggests that wide-format printers are better off 0

focusing on – and acquiring a deeper understanding of – a particular niche but many managing directors obviously feel that it’s more important to spread the risk, with a portfolio of markets that ensures they don’t rely too heavily on a single customer.

Do you plan to recruit in the next 2 years?

What’s driving this quest for new markets, niches and applications? There are virtually no barriers to 100%

entry in the wide-format sector – Boyall Graphics, the subject of our case study, started life as a screen traditional print companies may have forced mediumsized specialists in large-format to innovate by developing new services and taking a fresh look at what they offer the market.

The economic crisis has changed customer habits too. Most still insist that quality is more important than

% of respondants

printer – and the diversification drive by many

80% 60%

24%

0%

24%

14%

15%

Not sure

30%

No Yes

40% 20%

22%

64%

61%

46%

Up to £500,000

£500,000 - 2m

£2m+

price – but then they would say that wouldn’t they?

Buyers are desperate to ensure their advertising makes the biggest impact while incurring the smallest costs for storing and managing materials. So the pressure is on for faster turnarounds, just-in-time production, increased automation, shorter runs and for versioning/personalisation – although the evidence from this survey would suggest that this last trend is not yet as prevalent as some of the hype might

Are you having to make strategic changes within your business to win business from new markets/applications?

suggest.

What is clear from the 2011 Widthwise survey – if you look at the value added services medium-sized

£2m +

51.6%

48.4%

£500,000 - £2m

54%

46%

firms already offer their clients – is that many companies already look less like old fashioned print suppliers, quoting for jobs on a cost per square metre

Yes No

basis, and more like strategic marketing partners. This transition has gone from boardroom rhetoric to commercial reality, enabling firms to generate more added value, deepen their relationships with

41.2%

Up to £500,000

0%

58.8%

20% 40% 60% 80% 100%

customers and diversify into such services as data driven measurement and project management.

TECHNOLOGICAL OUTLOOK With slightly better margins than the rest of the industry – and a wider spread of markets – medium-

21

WIDTHWISE 2011

Applications for medium-sized firms (% of respondents involved in each sector)

Posters Exhibition and display graphics General banners / flags / signage Retail / POP / POS Window graphics Fine art / photography Wall murals Transport graphics Floor graphics Billboard / outdoor advertising Textile printing for banner / flags Building hoardings / wraps Cardboard engineering Textile printing for home / interior décor Industrial speciality (ceramics, metals etc) Packaging Textile printing for garments Other

78.9% 78.9% 70.2% 61.4% 66.7% 43.9%

in technology and 43.5% expect to invest more in 2011/12 than they did in 2010/11, with 41.3% spending about the same and only 15.2% spending less.

More than six in ten expect to buy a new wide-format

47.4% 49.1%

printer in the next two years. This should be good news for

49.1%

UV machine suppliers as just over half expected to buy a

33.3%

UV printer of some kind, with 31.3% having their eye on a

29.8% 33.3%

new UV curable flatbed printer. The other most popular

21.1%

targets were latex printers (16.7%), solvent printers

19.3% 24.6%

(14.6%) and textile printers (8.3%). Latex printers are

22.8%

clearly making considerable headway as a fast, green

7% 8.8%

0%

sized firms look well placed to make strategic investments

alternative to solvent printers for outdoor applications.

10% 20% 30% 40% 50% 60% 70% 80%

Printers are not the only focus for investment by medium-sized businesses. The other principal items on their shopping list are design software (39%), contour cutters for finishing (24%), and software designed to

How high a priority is finding/entering new wide-format markets/offering new services?

offer better management information or improve workflow (15%).

100%

6.9%

6%

10.8%

16%

information systems to analyse key performance

22.6%

80% % of respondants

Although Boyall Graphics has used management

3.2% 3.2%

0%

indicators that help it understand business performance,

24.5%

Not a focus

60% 40%

33.3%

only a minority of printers seem to want to use these systems to their full potential. For all the fanfare that

High

surrounds web to print applications, medium-sized firms

Very high

are the only ones in the 2011 Widthwise survey to say they will invest in this technology.

34%

24.5% Up to £500,000

Medium

48.4%

20% 0%

Low

44%

22.6% £500,000 - £2m

Reducing running costs and improving quality and speed should, the medium-sized firms who responded to this

£2m+

survey suggested, be the principal focus for manufacturers’ R&D budgets. Any by a small margin, hey said that the reliability of machines and consumables were the most pressing technological issues they faced.

Planned printer purchases (% of medium sized companies expecting to buy)

THE LAST WORD Large-format printing companies with turnovers of more

Textile printer

than £500,000 and less than £2m which have survived the

8.3%

Dye sublimation (non textile)

6.3%

UV curable roll-fed printer

6.3%

UV curable hybrid printer

economic strife of the last four years now look poised to prosper – as long as the fragile recovery in the UK 12.5%

UV curable flatbed printer Solvent printer (inc. eco-solvent)

0%

They are slightly more bullish in their attitude to

14.6%

Latex printer Aqueous printer

economy doesn’t completely run out of steam.

31.3%

investment and recruitment than their smaller and larger

16.7% 4.2%

10%

rivals and yet they also seem, from this survey, to have no 20%

30%

40%

50%

illusions about the challenge they still face. The strongest companies in this sector already seem to have realised that strategic change, which used to be something a company contemplated every decade or generation, may never be entirely off the agenda.

22

WIDTHWISE 2011

State of play: Case Study

On the Boyall

T

alk about return on investment. The decision

“Five years ago everything changed,” says Paul

to buy a Spuhl Virtu RS35 3.5m flatbed

Hickmott, who was brought in as business development

printer in 2008 has been core to a total

manager to help steer the company in a new direction.

business refocus and subsequent growth path for Boyall

“At that time the company was a screenprint operation

Graphics in Northampton.

really driven by three big customers and serving the

The company, which had a turnover of £990,000 last

vending machine graphics sector. It was great that the

year and anticipates nudging up to just over £1m for

likes of Coca Cola were on board, but the whole

year ending Dec 2011, started out 25 years ago as a

situation meant that a lot of cashflow was tied up in

screenprinter with owners Jeff Boyall and Wayne Cayton

stock and when new Health and Safety guidelines on

working from a converted garage, producing artwork by

healthy eating impacted on the vending machine market

hand before exposing it with an enlarger in a darkroom

the directors realised it was time to change.”

and making screens ready for print.

Today things are very different, with 20 staff operating

The upshot was a proactive plan to broaden the customer base and spread the risk, and to reduce stock

what is now practically an all-digital house, the central

levels to free up more cash for development. “So was

attraction being the Virtu printer - a savvy investment

born the idea of focussing on digital print and its

made on the back of a strategic decision to reshape the

capability of delivering a much wider range of products,”

business.

explains Hickmott. Hence the Virtu purchase.

Paul Hickmott was brought in as business development manager to help steer a new course for Boyall

Caption

24

WIDTHWISE 2011

The partnership brought in £30,000 last year and its growing.

In another move Boyall is working with a company that sells furniture into cafes etc., to produce bespoke printed tables, chairs and the like. It’s also involved with other high margin niche work – like glass splashbacks for kitchens.

The impact has been massive. First off, the vending

“You have to tread a fine line between investing money

machine graphics business was switched to this

in machinery that will help you explore new applications

production method then work began on seeking out

and markets and doing what you can with what you’ve

new applications for new markets. Within its first full

got. The latter may make you feel safe, but it’s not really

year of service Hickmott says the machine helped

longer term - you’ve got to invest continually, not just in

bring in £50,000 of new business. The company

capital, but in time and energy,” adds Hickmott.

budgeted for another £50,000 the following year and

“It’s not just the new kit that has helped Boyall on a

took £100,000. Not only that, but the £380,000 tied up

new growth path. Or marketing the applications it can

in stock fell to £100,000.

handle. We’ve had to learn about Key Performance

“That’s when we realised the true potential of what we

Indicators (KPIs) and understand fully how to use the

had,” says Hickmott. “It was clear that, with so many

information from management information systems. We

exhibitions companies in the area, that we should

now have regular management meetings and a Board

straight off turn ourselves into a full service provider,

meeting each month. Plus we have weekly departmental

which is what we did. That was great, because a lot of

meetings – everyone being much better informed of the

exhibition operations began using us because they could

issues affecting the business means they understand

see that they could cut out the subcontractor. And we

direction of the company and feel happier. Like many

didn’t have to grow our sales force either – because the

people we’ve had to tighten our belt but we’ve

work was coming in anyway.”

discussed it at weekly meetings where is has gone down

Given that nobody else in the area had one of these machines, and still don’t, the sensible thing to do was to

better than may have done otherwise.

“The management team knew that with the new

activate a really strong marketing campaign to spread

equipment installed there would be a need for fast turn

news of the company’s capability even further.

around and chasing of quotations and orders along with

“About two years ago we implemented regular

a growth in the number of smaller, locally based

marketing campaign (targeting the exhibition sector

customers as the company became more competitive

primarily) which we then follow up with phone calls. And

than the next printer!

we get a great response.” enthuses Hickmott. “The

“The company rose to the challenge, changing its

decision was taken to repeat the process again, over a

ethos from reactive to proactive. The result was a fast

slightly bigger geographical area, and likewise, this is

turn around of quotations and orders, no need for cash

paying off.”

to be tied up in stock as orders could be met same day

But it’s not all about exhibition graphics. Having

if required. To support this new capability the company

learned from the vending machine sector that its best to

implemented marketing campaigns comprising targeted

spread the risk, Boyall has spread its net and actively

email campaigns into pre determined market sectors,

gone after other, more niche business.

advertising and editorials in local newspapers and

For instance, a couple of years ago Boyall entered into

entered trade competitions to strengthen its brand

a partnership with Radhats to provide fully-branded hard

collateral locally and within the specific market sectors

hats to the construction and other industries. Boyall

the business had decided to target. Last year saw

spent a year doing R+D into the methodology of the

revenue from new, smaller, locally based customers

print job (for which it holds the patent) but was helped

increasing by 100% from the previous year so the plan

with costs by grants from various government bodies.

is working!”

25

WIDTHWISE 2011

State of play:

For companies with a turnover under £500,000

S

mall businesses are the lifeblood of a

difficult trading year, 27% of small companies managed

developed economy – that is one of the few

to improve their margins, 27% saw no change and 46%

certainties even economists can agree on.

said their margins had deteriorated. The good news was

Such titans of commerce and industry as Richard

that 48% said their wide-format margins were healthier

Branson and Sir Alan Sugar have their place but a

than on other parts of their print business. That may

country’s economic health owes a lot more to thousands

explain why seven out of ten said they expected more

of smaller companies that seldom hog the headlines.

of their turnover to come from wide-format in the next

Burdened by regulation, squeezed by suppliers and

two years.

customers, paid lip service to by politicians, small

Looking ahead, the major concerns for smaller

business owners don’t often feel like heroes. But in the

companies in the wide-format sector were the general

face of the greatest economic crisis since the 1930s

state of the economy, price competition and the number

many of these entrepreneurs have shown what John

of new players seeking to break into the market (see

Wayne – or Jeff Bridges in the recent remake of the

chart 1). Finance remains an issue – no great surprise

famous Western – would call true grit. The 2011 Image

given that the Bank of England has recently found that

Reports Widthwise survey suggests that large-format

banks are still failing to meet their targets for lending to

companies with a turnover of less than £500,000 remain

businesses – but the responses suggest it is less of a

resolute even though margins may be tight, finance

concern than might have been expected.

neither cheap nor plentiful and the economic outlook is just one giant question mark.

The results also challenge some common

Such worries may explain why smaller printers are significantly more bearish about recruitment than medium-sized or large businesses: only 46% were

misperceptions. Small businesses are often branded as

planning to recruit in the next two years and three out of

technological recidivists but a significant proportion of

ten weren’t looking to recruit at all. Yet they were more

smaller, wide-format printers have embraced social

bullish when it came to investment, with 38% expecting

media. Entrepreneurs are often lambasted for blinkered

to spend more in 2011/12 and 44% planning to spend

complacency yet the vast majority of smaller companies

about the same.

in this survey are contemplating investing in design

These results are supported by surveys by

software as they try to add value while four out of ten

organisations like the Federation Of Small Businesses

plan to make significant strategic changes. Large-format

which have found that although entrepreneurs are

printers with a turnover of less than £500,000 may face

becoming more confident, most aren’t expressing that

some tough challenges in the present but nobody could

confidence by hiring new staff. With 64% of respondents

accuse them of ignoring the future.

to the 2011 Widthwise survey having ten employees or less, head counts may not change significantly until the

STATE OF BUSINESS

recovery gathers momentum. Some small companies (see

In a year where the UK economy grew by just 1.7% – and

case study) have developed a business model which

16,044 businesses became insolvent – just surviving felt

relies on a few, multi-tasking staff, abandoning the more

like thriving. Over 100 large-format printers with

rigid demarcations of times gone by, and may be quite

turnovers of £500,000 or less took part in the 2011

happy not to recruit for years to come.

survey and their responses create an intriguing portrait of

In good times, companies focus on growth. Bad times

an industry where the last 12 months have been good (for

tend to concentrate the mind on cash and margins.

a surprising number of companies), bad and sometimes

Reading between the lines, the 2011 survey does suggest

downright ugly.

that many companies have realised that some kinds of

Let’s put some figures on this. On the whole, although

growth can seriously damage the health of a business.

half of companies with a turnover of £500,000 or less

Four of ten smaller companies were making strategic

reported that wide-format accounted for less than 40% of

changes to enter new markets, add value, expand their

their sales, this sector generally delivered a greater

range of services and/or to reshape their business for the

proportion of their revenue than for their larger rivals. In a

challenges ahead.

27

WIDTHWISE 2011

Major concerns for small businesses (Average rating 1-7, 7 being the most important)

4.45 3.11

3

MARKET ANALYSIS

3.59

4

As a rule of thumb, the markets served by large-format 2.27

2

2.97

5

5.46

6

printers with a turnover of less than £500,000 are much the same as for bigger companies. The usual suspects – posters, exhibition and display graphics, general

0

banners/flags/signage, retail POP and POS and

en er a Av l sta of a te ne ila o w bili f th en ty e tra / c ec Re nt os on cr t s o ui in of m tin Pr to t fina ey g st F ic he n af or e f w ei co m ce ith gn m ark th co pet et e m i ti rig pe on h t ti t sk ion ill se ts

1

window graphics – would seem to supply the bulk of a printer’s turnover, no matter what size they are. These five sectors – and fine art photography – are also expected to generate the most growth. That said, there

ou nt

G

are some differences in emphasis: smaller firms are

A

m

significantly more likely to be involved in fine art/photography and textile printing and less likely to be offering cardboard engineering.

Do you plan to recruit in the next two years?

There is a natural tendency for smaller firms to focus more narrowly on a few key markets or customers. That

100%

% of respondants

80% 60%

24%

0%

24%

14%

15%

may explain why, the 2011 survey results suggest, finding a new market is less of a priority for smaller

30%

Not sure

printers. One in six said that developing markets was a

No

low priority, or no priority at all, one in four didn’t

Yes

40% 20%

22%

64%

regard it as particularly important, while the same

61%

proportion regarded developing new markets and

46%

services as a top priority.

Up to £500,000

£500,000 - 2m

Yet if you analyse what smaller companies are doing

£2m+

to win new business, they seem much less complacent: 47% are attending seminars/conferences (some investment for companies that typically have less than ten staff), four out of ten are forging closer links with

Applications for smaller firms (% of respondents involved in each sector)

suppliers, and one in three are seeing to improve their brand image. Sales forces are always under pressure in

Posters Exhibition and display graphics General banners / flags / signage Retail / POP / POS Window graphics Fine art / photography Wall murals Transport graphics Floor graphics Billboard / outdoor advertising Textile printing for banner / flags Building hoardings / wraps Cardboard engineering Textile printing for home / interior décor Industrial speciality (ceramics, metals etc) Packaging Textile printing for garments Other

79.3% 71.2% 71.2% 62.2% 60.4% 53.2% 43.2% 45% 27.9% 30.6% 26.1% 20.7% 8.1%

a recession so it is no surprise to find 38% of smaller firms seeking to restructure their sales and marketing efforts. One in eight small firms were taking the destiny in their own hands by spending more on applications or R&D. Some suppliers have been willing to help printers experiment with new materials for little or no outlay.

Wide-format printing is not a commodity although it’s often bought as such – especially since the recession when many customers got rid of many experienced (ie

15.3% 12.6%

expensive) staff in their procurement departments. In

11.7%

their desire to add value, most smaller firms have put

11.7% 2.7%

their faith in creative design: almost two out of three offer this service and over half expect to invest in design

0%

10% 20% 30% 40% 50% 60% 70% 80%

software in the next two years. Investing in design is not new but it looks like a profitable strategy for printers as they seek to build closer, more enduring (and hopefully more lucrative) relationships with their customers.

28

WIDTHWISE 2011

Value-added services offered by smaller firms % of respondents offering services

in 2011/12 than they did in 2010/11 and 50% plan to invest in a wide-format printer in the next two years.

The scale of these investments may not be huge – 93% plan to invest less than £75,000 in wide-format in the

Da

ta bs

next two years – but it represents a significant risk for companies with sales of £500,000, especially given

16%

e ho st W i eb ng / sit m e bu an ild ag in in Va g g O / / ria cl the c bl o nt ean r e en da s t c ing ta re To pr a in W ta l p tin eb tion -to g ro / je ve pri ct m rsi nt o an ni n a C re ge g at m ive e n de t sig n

relatively robust stance: only 18% expect to spend less

5%

their investments. Yet they appear to be taking a

4%

companies could be forgiven for stalling or slashing

3%

for the UK economy, smaller wide-format printing

1%

With economists arguing in public over the prospects

49%

TECHNOLOGICAL OUTLOOK

65%

80% 70% 60% 50% 40% 30% 20% 10% 0%

that many are still facing pressure on their margins.

The technological focus for smaller firms is slightly different than for the industry as a whole. The most popular big ticket items are UV curable flatbed printers

Planned printer purchases (% of smaller companies expecting to buy)

but only 22% of smaller firms plan to buy one in the next two years, compared to 46.7% for firms with sales of £2m or more. The expense of UV is perhaps still

Textile printer

3.5%

Dye sublimation (non textile)

4.7%

something of a deterrent for smaller firms who are far

UV curable roll-fed printer

4.7%

more likely to invest in a solvent printer than their

UV curable hybrid printer

larger rivals. Yet the research suggests that smaller

22.1%

Solvent printer (inc. eco-solvent)

print companies have been quick to appreciate the potential of aqueous and latex printers.

5.8%

UV curable flatbed printer

33.7%

Latex printer

12.8%

Aqueous printer

12.8%

The 2011 survey doesn’t reveal any great 0%

enthusiasm for such trendy applications as variable

10%

20%

30%

40%

50%

data print or Web-to-print in any sector of the wideformat industry but smaller firms appear even less intrigued by these innovations than their larger rivals.

One intriguing paradox jumps out of the results. Asked to identify the biggest technological challenge they

Do you expect to invest in any of the following for wide-format in the next 2 years?

faced, smaller printers identified workflow yet only 7% problem. Maybe the software suppliers still have some

60%

convincing to do.

50%

51%

expect to spend money on software to ease this

20%

industry that was also undergoing rapid, significant technological change – is that more owners didn’t choose to ride off into the sunset. But from the 2011 Widthwise survey, you get a sense of a sector that does, at least, believe it is back on solid ground and

4%

10%

0%

Fin

far from beautiful. The wonder – especially in an

Fin ish

business in the wide-format printing industry has been

in g ish Fin – c in ish on g t So – s ing our ftw tra – c ar ig lam utte e ht in r 9% – l w in at So or e c or ftw kflo ut ar w ter 4% e / So – M ftw de IS 7% s So ar ig ftw e – n ar W e 2P 0% –V D O P 0% th er

30%

Since the 2007 economic crisis, running a small

26%

40%

THE LAST WORD

has decided that even though it can’t predict the future it can still plan for it.

29

WIDTHWISE 2011

State of play: Case Study

Small is beautiful

I

f small is so beautiful, why does everyone want to

you need to keep coming up with something new and

grow their business? Well, perhaps not everyone

offering them solutions they might not even realise they

does – not by the traditional measure of turnover,

need – then they will stay loyal to you.

number of employees etc. anyway. According to Peter

“This means accepting that you’ll have to devote

Barnham, one of a trio of directors that formed Milton

energies to R+D, and we do. The fun for me is finding

Keynes-based large-format specialist Graphics Works at

out what a machine can do that the spec. sheet doesn’t

the end of 2005, success is about growing margin and

mention. An ideal customer is one that comes to us with

running a small, flexible operation is key to that.

a problem and we investigate how to deliver a solution.

By the time you read this Graphics Works will have moved into its third factory and grown its turnover to

money, but the concept will subsequently. And that’s the

£500,000. Over £100,000 has been ploughed into kit

sort of work that brings in higher margins.

since the formation of the company which now runs four

“Let’s be clear – we see no point in chasing turnover.

roll-fed Mimaki machines, an Oce Arizona 350GT and,

If our machines have capacity and someone comes in

the newest addition, a Canon iPF800S (plus various

with a low margin job we’ll take it but we won’t chase it.

laminators). But it still has only five staff and though the

That’s a good way of killing yourself ultimately.

intention is to increase profitability, Barnham is bent on keeping the company slim and trim.

“We’ve survived well during generally bad economic times because we’ve been flexible enough to find new

“To grow as a business you have to be light and very

solutions for customers, developed more profitable

flexible – too strict a growth strategy may hamper you. I

niches [like photo printing onto acrylic and bespoke

believe it has been easier for the smaller guys to

digital wallcoverings etc.] but also because we’ve

succeed in the last two years because it’s easier to

been financially astute and reviewed how we work

change direction when you need to. That’s why we’ve

with our suppliers.

deliberately kept slim in terms of personnel. I’d much

“When the recession kicked in for instance, we

rather have a few really experienced, committed and

looked at the materials we were buying. For us 24-hour

entrepreneurial people that I pay more than have a

turnaround on jobs is normal and one-to-two hours is

bigger staff that do what they think they need to do and

regular! Given that we are printing on some more

go home.

unusual substrates etc. the answer wasn’t to destock

“I think defined job definitions within a business are a

but we negotiated on better rates with suppliers and

thing of the past. Everybody these days needs to be

also made sure we went with those who were keeping

entrepreneurial, and that means everybody in the

their own stock levels up and could therefore respond to

organisation. My idea is to have few people, but all of

us all the quicker. Plus, those we work with are happy to

whom come up with ideas for development. My background is in R+D and the other two directors come from a creative background, which is perhaps why we see it this way, but it seems to be working for us. People within a business need to multi-skill and understand how their input can feed into the business. Everyone here for instance talks to clients – they have the background, knowledge and confidence to do that and they therefore all feed back information that will expand the company.”

That client feedback is essential to how Graphics Works does business and to its ongoing development.

“It’s easier to build on existing customers than finding new ones – plus you don’t want to lose those you have – so to keep them sweet and the business moving forward

30

The first job, because of the R+D input, may not make

“

I THINK DEFINED

JOB DEFINITIONS WITHIN A BUSINESS ARE A THING OF THE PAST. EVERYBODY THESE DAYS NEEDS TO BE ENTREPRENEURIAL

”

WIDTHWISE 2011

supply material for R+D purposes, not all are.”

Also crucial to Graphics Works’ success has been the company’s financial standing and ethos. “Part of the reason we’ve done well is that when we set up the business it was purposefully with no borrowing so that we wouldn’t be hampered and when the economic tide turned that stood us in good stead. That, together with the fact that we always pay on time means we’ve had no trouble in getting credit with the consumables suppliers etc. On the kit front, we’ve managed to secure any monies needed from the normal lenders.

Interestingly, we’ve found the suppliers’ own finance houses to have been tighter than the high street banks, some of which have also been difficult, but others have given us the nod within a couple of hours.”

So what key messages would Barnham send out to companies in a similar turnover bracket? Put simply, “be flexible”.

“You have got to be in a position to be whatever your client wants you to be, no matter how unreasonable that might seem! There has been a lot of deskilling within the client-base. Years ago, staff were experienced and understood how print processes worked. Now you’re working with people who have no idea what they’re ordering. For instance, we had someone asking us for bespoke wallcoverings for a 151-room hotel – they wanted delivery in four days.

People just don’t understand that producing a massive wallcovering isn’t the same a printing off a few business cards.

“The problem is that there’s no clear route to print anymore, designers hand off projects to contractors who have no interest or involvement in what they are asking for. It used to be that a designer within an architect would have a lot of materials knowledge. Now they just want to sit in front of a screen and design and don’t get excited about materials and possibilities which is why we encourage designers to come to us and see for themselves what we can do. We need to educate them about what’s achievable, and then also put a bit more reality back into timescales.

“The print sector also needs to start making money from pre-press again. People are frightened to charge and so everything pre-press has been devalued – we need to claw that back.”

Peter Barnham: runs a small company with big vision

31

WIDTHWISE 2011

Secrets of success LASCELLE BARROW Co-founder, Augustus Martin A lot of my success in large-format print has been about buying the right equipment for the business.

Along with this goes avoiding buying some of the wrong equipment! I have three principles that I try to stick to: - Only buy equipment where you know you have a market. If you are buying and hoping for sales you can be sure that other people are doing so as well.

- Buy the right equipment for your customer base and workload. Buy a machine that delivers the right quality and the best combination of running cost, speed and machine cost for your business - Large-format is still a fast moving market. Always try to buy equipment where the purchase is justified on the work you actually do now, but that also has something extra to offer. Maybe some extra width or an extra colour that will open up new possibilities for you and your customers that will take your business forward.

These principles have helped me make some purchases that have done very well for our businesses. They have also stopped me from making some other purchases that would just have contributed to the overcapacity so prevalent in our industry.

MARK SIMPSON Chairman, Simpson Group I don’t believe the ‘secrets of success’ in the large-format print sector are that different from any other business. The bottom line is that you have to work hard and focus on your business almost 24/7. Yes, I even dream about POS. If I were asked to pick out one key area to ensure success it would be to cultivate an obsessive focus on your customers and their needs. This entails getting everyone who works in your business to understand how they add value to your customers. Too often in business there is a one size fits all mentality where customers need to fit in with the way a business operates. This approach is no longer relevant. You need to tailor your products and services to suit the customer so making it easy to deal with you. For example customers should be able to access information and advice quickly and easily. Being able to speak to a helpful, knowledgeable person face to face or over the phone is essential. The over use of email as a form of business communication is a curse to developing business and relationships.

MICHAEL AYERST Managing director, VGL VGL's business is dependant on offering quality, service and value.

This sounds simple but if you get it right customers will trust you. The key to any business success is the customer and a long-term loyal customer is the starting point for any growing business. We take quality, service and value seriously and we invest continuously in technology and people to achieve customer satisfaction on a continuous basis. Behind what sounds the most obvious statement is a lot of hard work from everyone at VGL to avoid complacency, which, in my view, is the death of a company.

ANTONY BAGLIONI Business development director, BAF Graphics We believe that being able to understand the requirements of our clients and translate these into well thought out graphic solutions is key to success in our business and demonstrates that we are more than just a print company.

Accurately interpreting the needs of our clients and offering them ideas and advice based on knowledge and experience, enables us to be able to provide the best value to our clients.

Hand-in-hand with this knowledge we aim to offer our clients with a seamless end-to-end service that includes artworking, production and installation. Our ultimate aim with each of our clients is to operate as an extension of their visual communications marketing team interpreting their concepts into graphic solutions that draw from our experience and the full scope of our production capability.

TIM ANDREWS Managing director, Hollywood Monster Continuous investment in our equipment and staff is key to our success. We have invested heavily in the latest technology enabling Hollywood Monster to provide for high-profile clients across all sectors including sports stadiums, festivals, rock and pop concerts, shopping centres and property developments.

We’ve worked hard to diversify and break into new market sectors and that effort is now beginning to pay dividends. We are winning new contracts that are providing us with exciting opportunities to develop and grow our business. More customers are recognizing and appreciating the quality of our work and Hollywood Monster has gained a great reputation for delivering projects on budget and on time.

33

WIDTHWISE 2011

Suppliers’ viewpoint

The Widthwise poll purposefully surveys only print businesses involved in large-format print to take the temperature of the sector. But what do their suppliers make of the current market? Melony Rocque-Hewitt asks three key questions of some of the main wide-format hardware manufacturers. Here’s what they have to say…

From your viewpoint, how would you sum up the current state of the wide-format market?

AGFA:

The use of wide-format printers is now an established production process, and is becoming more focused on

applications using a growing variety of rigid and flexible materials. As a result, we are developing and building greater versatility and productivity into our machines, based on the core technologies already accepted in this industry sector.

CANON: The wide-format market showed impressive growth during 2010, demonstrating that it is already bouncing back from the recession – attributable in part to the rapidly expanding range of applications made possible by wide-format print and, to the fact that more businesses are seeing the benefits offered by it.

DURST: We have seen an increase in industrialisation within the wide-format market. To remain competitive in the market you need consistently high productivity, which requires automation and sophisticated workflow systems. Value-added turnover can be achieved through developing new applications and specialisation in niche market areas.

EPSON: Our ink and media sales would suggest that areas of the wide-format market are still busy and that there is work out there. That said, businesses are generally not expanding and for many, hardware replacement cycles are being lengthened.

FUJIFILM UK: The current state of the wide-format market is buoyant. Due to the combination of a reduction in run lengths, a growing need for variable data and more POS campaigns on a broader range of substrates, 2010 was our best year for digital hardware sales.

HP SCITEX: In spite of the tough trading conditions, 2010 actually proved to be relatively successful for our HP Scitex division, thanks largely to the continued interest in our latex technology, which ultimately led to a positive impact on our overall market share position.

MIMAKI: Our continued development of new and complementary technologies ensures that even in tough economic times we're seeing positive levels of new investment across the many sectors we work in.

OCÉ: We’re seeing consolidation. It’s like a forest fire going through the industry. While this can be devastating for some, the stronger printers, particularly those who have already invested in new technology, are now finding space to provide more added-value and are ready to expand as the upturn arrives.

ROLAND: Our machines are being used increasingly by users in complementary areas including industrial production, textiles, labels, proofing and prototyping, with growing interest from the commercial print sector.

SCREEN: The wide-format market is buoyant and growing fast. Digital wide-format is unlocking potential in many markets as more people are discovering and unlocking new applications.

34

WIDTHWISE 2011

1.

2.

3.

4.

What do you think will be the most significant trends/developments in the sector in the coming year?

5.

1. Gill Mussell, Canon UK, LFP product manager 2. Steve Collins, Agfa wideformat inkjet account manager 3. Michael Lackner, Durst marketing manager 4. Mark Rowland, HP 5. Nick White, Epson sales manager for pro-graphics

AGFA: There is considerable talk about the growth in digital textile production, and we see our Anapurna and Jeti UV-curable production machines fulfilling this capability as well as Agfa’s dedicated fabric printer. In addition users are looking for niche markets to expand their service offerings.

CANON: A number of businesses that have previously outsourced their large-format work or not used wide-format printing at all are now bringing it in-house. Undoubtedly one of the reasons behind this is a need to keep a closer eye on costs, which is also behind another important development – the introduction of pay-per-click models to the sector.

DURST: Over the next year or so we will see further advances in productivity. Such factors as fast order fulfilment, mass customisation and print-on-demand will take on even greater importance. For the manufacturer this requires producing highly flexible printing machines with the typical features of variable data printing and fast media change.

EPSON: The businesses that are performing best in the current climate are those that have used their expertise to extend into new areas, such as new online photo books for example, and this trend will continue in the coming year. Conversely, some businesses are bringing their print in-house to increase flexibility and reduce turnaround times. This is a trend that will grow supported by easy to use and affordable hardware and software.

FUJIFILM UK: With printers needing to increase output and quality, cost per copy will play a key role as digital technology continues to challenge a broader range of print applications and market segments including packaging and industrial. There will also be continued investment in ink developments in order to enhance the flexibility of end-user application. UV Ink technology will begin to move more into the traditional entry-level solvent market.

HP SCITEX: We will see an increase in the number of electronic displays used in conjunction with digitally printed graphic displays, especially in the retail environment, as well as in public places like airports and railway stations. There will be an increasing trend towards PSPs moving into the niche and specialist areas of print production but still retaining the capacity to produce more generic print.

MIMAKI: Outdoor durable print capability continues to be the mainstay of our core market, but we're seeing that augmented by dye sublimation output (which is outdoor durable in itself - just on different substrates) and LED UV technologies. We’re expecting the flag, fabric POS and event branding sector to continue to expand, allowing us to, at long last, catch up the continental European market. Green issues will remain at the fore.

OCÉ: As consolidation continues, companies are looking to partner with organisations that can help them add value to their businesses and support them for the long term, enabling customers to focus on being creative. We are seeing that support services are as important as the equipment choice, because if a machine is down it costs far more than the savings people often think they are getting.

ROLAND: We’re experiencing a tremendous upsurge in demand for more affordable production units that can be used by experienced and new users of professional inkjet equipment. As a result, we’re putting our wide-format expertise into desktop solutions that bring our advanced technologies to a very broad spectrum of end customers.

SCREEN: You will see more wide-format companies starting to diversify to offer a range of high-value products, and carve out profitable niches for themselves in areas such as office and home decor, small-format personalised gifts, signage and decals etc.

35

WIDTHWISE 2011 6. Bui Burke, Screen UK sales manager 7. Duncan Jefferies, Hybrid Services (distributor for Mimaki) marketing manager 8. Brett Newman, Roland DG technical director 9. Nigel McNae, Fujifilm UK national sales manager, screen and wide-format inkjet 10. Dominic Fahy, Océ UK business group director, imaging supplies and display graphics

6.

7.

8.

9.

10.

What do you think will be the key issue for wide-format digital print in the future?

AGFA: We are seeing greater emphasis on workflow requirements. Companies are investing in our wide-format printers as we are able to support businesses of all sizes that need to offer accurate colour managed output.

Throughput efficiency is also important, and the increase in popularity of the Agfa M-Press Tiger is testimony to how we are meeting this requirement.

CANON: Customers are telling us that they need to keep a really close eye on what every print costs, how it is used and what return it generates. This is a need that wide-format digital print is particularly well positioned to respond to. For instance, in response to customer demand Canon has recently developed Total Service Care, a payper-click model for large-format print.

DURST: One of the key issues will be the greater importance placed on green products. Retailers and brands will demand greener products and smaller carbon footprints, requiring the use of environmentally friendly media and inks, with low toxicity, free of VOCs and recyclable.

EPSON: A key issue for businesses during the current economic situation is to find enough work. This will result in flexible printers that can deliver profitable business over multiple applications remaining solidly in demand.

FUJIFILM UK: Key issues will be quality versus output and cost per copy. ’Digital awareness’ and ‘education’ will also be buzzwords, as will discussion on the availability of finance.

HP SCITEX:

We envisage the acceleration in the replacement of solvent technologies by either UV inks or latex

inks – the range of solutions now available using these two technologies makes solvent an increasingly redundant option. The ‘green’ factor should not be under estimated either. Successful PSPs will need to offer clients printed output that helps reduce the impact on the environment.

MIMAKI: The (cap)ability to diversify is becoming ever more important. Being able to produce new, exciting and lucrative product lines is a sure-fire way to prevent customers from straying. Answering 'yes' to a request means the customer is less likely to look elsewhere, so ensuring your digital print arsenal contains hardware capable of producing the broadest possible range of products is an easy way to put this in place.

OCÉ: Print companies need to choose their printer supplier carefully and think of it as an ongoing long-term partnership. We are working with many of our existing customers to upgrade them to a faster system. Companies that have invested in the right systems and have a solid business plus the right skills will be in a stronger position to grow their business.

ROLAND: People want versatility at an affordable price, and our new desktop solutions complement Roland’s wide-format systems. Users need the ability to produce more than just print — they want tactile finishes and special effects, too.

SCREEN:

Companies need to be looking for better than standard quality and increased flexibility and functionality

from their print systems. As time passes the quality expectation in the general market will increase, so it is important to factor this into your thinking when investing in a device that you may well be using for three to five years.

36

WIDTHWISE 2011

sustainability Should we be looking at the likes of Wal-Mart’s programme?

T

he topic of sustainability has inspired hundreds of conferences, thousands of regulations and millions of speeches. So it comes as something

In Wal-Mart’s 2010 sustainability report, the retail giant (which owns Asda) says: “When we launched our

of a shock to discover – from question 32 in the 2011 Image

sustainability programme we set goals to guide our efforts to

Reports Widthwise survey – that only 18% of respondents

become a more responsible company. We would: be

have environmental accreditation. That failure is put in

supplied 100% by renewable energy, create zero waste and

context when you consider question 33: only 4% of

sell products that sustain people and the environment. In

respondents said most clients asked about accreditation,

updating our goals, we turned the focus to increasing the

while 63% said customers never asked.

transparency of our supply chain. To know the true impact

From these stats, it would be easy to conclude that wide-

of our business, we need to look at were products are

format printers and their customers are refusing to recognise

sourced and manufactured, how they’re shipped and

the significant, radical changes that lie ahead. Easy but

packaged, how they are used and what happens to the

wrong. In answer to Question 31 – how important is it to offer

product when it’s disposed”.

green options? – 59% of respondents said it was more

If any printer was in doubt about what they need to focus

important than two years ago, while 14% said the issue was

on to green up their act, the Wal-Mart statement gives a

still important. As you might expect, the bigger the printer

clear guide. It’s not just about what substrates or inks you

the more weight was given to the environment, with seven

use, it’s about everything: the waste you produce, the energy

out of ten businesses with a turnover of £2m or more saying

you use, the way you transport your product and even what

green options had moved up the agenda.

actions you take to offset the environmental consequences

The charitable conclusion to be drawn from all this data is

of your business. Where Wal-Mart has led, many companies

probably that most printers are more focused on offering

– not just in retail – will surely follow. Clearly, the 25% of

green options than pressing for a certificate to prove their

printers who, in response to Question 31, denied that

credentials. That is not a stupid view – few of us judge a

environmental issues were of any importance are probably in

company on the quantity or quality of the certificates in their

for a rude awakening.

lobby. But it may soon prove untenable, especially for

So what should wide-format printers do? The obvious

printers who are supplying publicly quoted companies or

place to start is with an environmental audit of your own.

organisations in the public sector. As these groups are hardly

This should be brutally honest so you have a truly accurate

short of potential suppliers, they could simplify their

picture. Sustainability can be a vague, almost opaque term

procurement process with one box-ticking exercise vetoing

so be sure to define your terms clearly, explaining what

any supplier who hadn’t, for example, met a standard like

sustainability means for your business, why its important and

ISO 14000/14001. The more high profile a brand, the more

who it is important for. You can then – as Wal-Mart did – set

likely the company is to declare that it only hires ‘green

goals and targets to guide your policies over the next few

printers’ – whatever that might mean. This line of thinking

years. (And one of those targets should be achieving some

may explain why the poll shows that 48/6% of printers with

kind of accreditation.) No company can transform its carbon

sales of £2m or over do have environmental accreditation,

footprint overnight. Indeed, customers would be suspicious if

compared to just 6.2% for businesses with a turnover of

you did. Suppliers can help, both with specific products –

£500,000 or less

HP, for example, has developed a carbon footprint calculator

There is a growing pressure on big companies, especially retailers– which buy a lot of wide-format print –

38

vigilant about their supply chains.

– and general advice on best practice.

Doing the audit, defining your strategy, these are the

to environmentally audit their entire supply chain. This

glamorous bits. But many attempts to make business

pressure was sparked by a few scandals where well-

greener go awry because they aren’t monitored properly. The

known corporations were revealed to be using child

best way to ensure you stay on course is to give a senior

labour or running sweatshops. But as the pressure has

manager, with direct access to the managing director,

grown, the demands have widened and many global

responsibility for the programme, ensuring that actual gains

businesses, desperate to protect their brand image by

match projected targets – and raising the alarm if they don’t.

being good corporate citizens, are becoming much more

This manager should also be responsible for spreading the

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How important is it to offer ‘green’ options these days?

Overall response

Response by company size

Less important than two years ago – 9%

No shift - important – 14%

More important than two years ago – 59%

% of respondants

100%

No shift - not important – 18%

80% 60%

8%

8%

26%

17%

12% 6%

16% 5%

19%

No shift - not important No shift - important

40%

71% 56%

56%

Up to £500,000

£500,000 - £2m

Less important than two years ago More important than two years ago

20% 0%

£2m+

Do you have environmental accreditation?

Overall response

Response by company size 120 Plan to – 14%

% of respondants

100%

Yes – 18% No – 68%

11.9%

16.7%

18.9%

80% 32.4%

60% 40%

81.2%

66.7%

No Yes

48.6%

20% 0%

Plan to

6.9% Up to £500,000

16.7% £500,000 - £2m

£2m+

Do clients ask for environmental accreditation?

Response by company size

Overall response 100%

Most – 4%

33.3%

80% 60% Some – 33%

None – 63%

45.8% None 80.2%

Some Most

40%

54.5% 52.1%

20% 0%

17.8% 2.0% Up to £500,000

2.1% £500,000 - £2m

12.1% £2m+

good news when landmarks are passed. Too many bold

more people buying into the green market, prices are coming

attempts to make businesses sustainable peter out, after a

down.” Indeed some mass-produced environmental products

few months, into notices on walls telling customers how

from suppliers like Dufaylite are cheaper than PVC. At a time

many gallons of water or tonnes of paper have been saved.

when there is relentless pressure on costs, what’s good for

That audit might help you educate your customers. Not every buyer of wide-format print is as ambitious as Wal-Mart.

the environment can often be good for the bottom line.

So what, you might ask, could going green do for your

Many pay lip service, deterred by misperceptions about the

business? Not much really. Just deepen your relationship

costs. As the Norwich wide-format printer Repro Arts has

with your customers, grow revenue, reduce your costs and

pointed out, “People may think that price is reason enough to

improve the working environment. The excuse that you’re too

look the other way when buying eco-friendly and stick to

busy to think about green issues at the moment looks less

cheap, old-fashioned plastics and PVC products. But with

convincing than ever.

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WIDTHWISE 2011

How good is your company?

I

n Hollywood, they say a good director sometimes makes a bad movie but a bad director never makes a good movie. Business isn’t quite that simple. Bad companies can have a good idea that gives them an edge, but in the long run their inferior management will still be their downfall.

Business is so volatile in the 21st century that today’s winners can be tomorrow’s losers. Yet a critical appraisal

1

of the works of such management gurus as Jim Collins, Tom Peters, and Peter Drucker suggests that successful, enduring businesses share certain qualities. True, some traits are incredibly generic: Collins’ advice to “hire good people” will only come as a revelation to managers who have consistently appointed jerks. With such caveats in mind, let’s explore the characteristics of an enduring business.

Define your terms

There are many ways a business can be good or great so be clear which kind of greatness you seek. For some, longevity or consistent profitability are paramount. Others seek glory or influence. Reviewing Jim Collins’ book ‘Good To Great’, Peters said: “Some companies Jim has chosen have performed well but haven’t led anybody anywhere. I don’t give a damn where Microsoft is 50 years from now. But Microsoft set the agenda in the world’s most important industry at a critical time and that to me is leadership, not the fact that you are able to stay alive until your beard is 200 feet long.”

The choice between being the new Microsoft and a very long beard sounds simple but each managing director will weight influence and longevity differently and that weighting should shape your strategy.

2 3

Decide why you’re in business The obvious answer is to make money. But successful companies – from Apple to HP and Virgin – have a culture defined by something more than profit. The right ideology can inspire staff. You don’t need a fancy mission statement. At HP, the ideology, as defined by founders Bill Hewlett and David Packard, consisted of five simple principles, the last of which was two words: “Integrity, period”.

Make good decisions

Sounds trite doesn’t it? But if your decision-making is flawed, you’re less likely to hire the right people, buy the right technology or service customers. Think of the last ten major decisions your company has made. How successful were they? What would you have done differently? And were decisions taken after different views were aired and debated?

Many bad decisions are driven by confirmation bias. We are hard-wired to believe evidence that supports our view and often dismiss contradictory data without even realising it. Confirmation bias – and groupthink, the term for our tendency to gravitate to a consensus no matter how absurd it might be – still blight many organisations. Yet research has shown that even a lone idiot challenging a consensus will lead to a better decision. Imagine what a difference intelligent, open debate might make.

4

Stay humble

The cult of the rock star CEO is so powerful we assume they should all be as visionary as Steve Jobs or as arrogant as Sir Alan Sugar. Yet they are not your only role models. Gary C. Kelly, the new CEO of Southwest Airlines, recently defined leadership saying: “You need to be a good person and genuinely feel joy at other people’s success, and not be so inward looking. An ideal leader is described by other people as someone who convinces them he cares about them.”

Bosses don’t always know best, so when your business faces an important strategic choice don’t preface the meeting with a clear statement of your views.

The lives of the great business leaders share one painful recurring theme: like rock stars, CEOs suffer from built-in obsolescence.

How they prepare for that – by building the right team or planning succession – is their ultimate test. Many studies show that firms that grow their own management are likely to outperform those who import leaders.

If, as Collins says, the ability to embrace change defines a great business, your company is more likely to adapt and evolve if your strategy is driven by debate, not ego.

The clinching argument for humility is the fall of Enron. That’s what happens when your managers really believe they are “the smartest guys in the room”. Hubris is always expensive in the long run.

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5

Serve your customers

For Peter Drucker, this was a company’s primary responsibility. Profits are an essential condition of the company’s continued existence but they generally follow if you are servicing customers. The design thinking revolution – in which designers changed their customers’ thinking (and increased their own value) by studying the end user’s needs – is a case in point. The most compelling information you can give your customers is to tell them something they don’t know about their customers.

6 7

Trust your passion

Tom Peters and Collins often differ but agree on the power of passion. Peters says: “All the strategy guys talk wonderfully about these ideas and skip over the incredibly boring part – people.” Collins thinks passion can be quiet, Peters prefers an upfront leader who thrives on chaos: “Wouldn’t you like to think a quiet leader would lead you to the promised land? That’s total, utter bull.” The key is that passion exists and spreads beyond the boardroom.

Ask questions

New bosses often arrive with inspiring mission statements. But when Darwin Smith took over a famous, but mediocre corporate giant called Kimberly-Clark in 1971, he didn’t have a mission – he just asked questions.

What could the company be the best at? What was it especially passionate about? How could it improve its numbers? The questions helped Smith transform Kimberly-Clark. His brave decision to sell paper mills and bet on an emerging product called Kleenex now looks like genius. Smith was practicing what Drucker called “planned abandonment”, recognising that yesterday’s successes were no longer useful.

8 9 10

Balance discipline and creativity Few companies have managed the tension between individual innovation and systematic organisation as well as 3M under William McKnight, president from 1929 till 1948, who helped make innovation a repeatable, systematic process. He gave staff scope to think but created enough barriers to ensure that only the best ideas – like Post It – survived. McKnight proved that quality, not quantity, of ideas was paramount.

Be realistic about technology The new economy has led many to overestimate the power of technology. When Collins studied businesses that had been hailed as technological pioneers he found “these companies dwelled little on technology as a key variable”. He concluded that technology couldn’t make a bad company good, it just accelerated the goodness that already existed.

Create a cash generating moat American billionaire Warren Buffett asks two questions when analysing a potential acquisition. Does it have a moat (a defensible competitive advantage)? Does it consistently generate cash? They are both useful, common sense ways of appraising your company. If you don’t have a moat, could you create one – and generate more cash? These are not questions you read in many business bestsellers but the answers could profoundly impact your company.

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WIDTHWISE 2011

The Last Word the menu. She also believes it is far easier to create integrated media campaigns, as print technology makes it easier to adapt imagery from different media channels.

A trend for bling, says Evans is one of the more noticeable trends arising within the last 18 months. “Print that shimmers Pauls Evans of Transport Media

L

or is a good and cost-effective alternative to electroluminescent and is very popular,” she states.

In addition to this, a tendency to enhance print with sound

ife’s a journey, not a destination! Never has this

and interactivity is growing. Bus shelters for example, have

popular nugget of self-help advice been so

become complete environments that can incorporate sound

appropriate. With people spending an apparent

effects, or even contain actual panels that act like vending

70% of their time out of their home it’s not surprising that

machines. “All these add-ons to print really enhance the

out-of-home advertising is one of the fastest growing

experience,” says Evans.

traditional advertising mediums in the UK. Unlike with any other medium you don’t have to tune in, turn it on, dial up or turn the page to see it, it’s just there for free, incidental and unavoidable and with the advent of mobile marketing, the out-of-home space is becoming even more dynamic.

Planning and buying manager Paula Evans at Transport Media, the Manchester-based specialist ‘out-of-home’ planning and buying agency, believes that digital wide-format printing has been instrumental in the rise of resurrecting dead space – the time it takes to get from A to B, now enticingly known the Third Space.

“Digital wide-format printing has allowed advertisers to be far more flexible, vibrant and creative. It has really raised the bar on quality and therefore client confidence levels. We know for example, we can match any pantone or special colour, which in the past would have been a problem. I can’t stress how important accurate colour representation is when

“

INKS, THE ON-GOING DEVELOPMENTS IN SUBSTRATES ALL KEEP PUSHING THE BOUNDARIES OF CREATIVITY WHICH IN TURN CONTINUES TO KEEP PRINT STRONG AND RELEVANT

it comes to branding and logo prints,” she says.

“From a planning perspective, wide-format digital printing

”

While Evans agrees that moving imagery is currently

has substantially raised the bar on quality as well as

biased to London other key city centres such as

durability issues. A lot of this has to do with advances in

Birmingham, Manchester and Glasgow also use screens,

substrates, materials and the inks used. For example, vehicle

static print is still dominant, and as far as the regions are

wrapping can now take the daily wear and tear of city life,

concerned print still makes up 95% of campaigns.

not to mention the forces of nature. Our clients get far more value for money. Campaigns look good for longer.

“Digital printing has made everything even more efficient -

“There is no doubt mobile interaction is on the rise but there will always be a place for static print,” she says. “Media owners have invested heavily in making out of door spaces

the fact that we can now print on one high quality vinyl skin

attractive to brands. The versatility of inks, the on-going

rather than on split paper sections makes everything look so

developments in substrates all keep pushing the boundaries

much better and removes any installation errors,” she adds.

of creativity which in turn continues to keep print strong and

In her ten-year career as a planner, Evans has witnessed a plethora of new applications that in the past weren’t even on

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THE VERSATILITY OF

relevant.” www.transportmedia.co.uk