Wednesday, January 27, 2010

Second FESPA Economy Survey Shows 70% of Printers Innovating out of Recession

There are few sources for meaningful or up-to-date information about the reprographics industry; two that come readily to mind are and

As to IRGA publications, if you are involved in the reprographics industry – especially the A/E/C services part of the industry, you should be an IRGA member, as that would give you the opportunity to read all of the IRGA’s publications.

As to Wide-Format Imaging, which, if I’m recalling this correctly, grew out of prior publications, “Modern Reprographics”, and, before that, “Plan & Print”; when it was “Plan & Print”, Plan & Print was mostly devoted to the A/E/C reprographics industry, but, later on, it morphed into a publication that covers other imaging/graphics sub-industries, including the Screen Printing Industry (that’s the industry that prints our T-shirts and Sweatshirts and other cool things!) If you’re in the reprographics business, you should be a subscriber to Wide-Format Imaging.

This afternoon, I got an automatic e-mail from Wide-Format Imaging to tell me that a new article had been posted about a recent economic survey conducted by “FESPA.” Even though reprographers may be concerned about issues that are different from the issues that “other printing industries” are concerned about, the article does speak to issues that even reprographers should think about.

FESPA = the Federation of Screen and Digital Printers Associations; and FESPA is an association of screen and digital printers in 26 European countries.

The title of the article……

Second FESPA Economy Survey Shows 70% of Printers Innovating out of Recession

Posted (on Wide-Format Imaging’s web-site) January 21st, 2010 09:31 AM

FESPA's second Economy Survey shows that the wide-format printing community is moving on from the defensive survival tactics of 2009, using innovative and proactive sales and operational strategies to improve its business fortunes moving into 2010. 70.2 percent of respondents had used new products or processes in their operations to help them through the economic downturn, with 61.5 percent adding products to their portfolio, and 60.6 percent entering new markets.

The second Economy Survey was conducted by FESPA in the fourth quarter of 2009, in partnership with InfoTrends. It shows that the community's outlook entering 2010 is broadly optimistic. More than a fifth of the respondents questioned at the end of 2009 thought the market was already recovering, and more than half expect recovery to previous levels by the end of 2010. Conversely, the Survey clearly summarizes the impact of the downturn in the wide-format market. Of the 217 respondents, 93.1 percent agree that there has been an economic downturn in the industry, with 56.4 percent viewing 2009 as the worst year they have ever seen.

The mean level of business decline reported is 15 percent; however, the community is polarized, with 20 percent experiencing no loss in business activity and another 20 percent showing a decline of 25 percent or more. Manufacturers and resellers report the same average decline as print service providers (PSPs), underscoring the industry's tightly connected supply chain.

The competitive landscape is in a state of flux, with 60 percent of those surveyed reporting that competitors had consolidated or gone out of business, 43.1 percent indicating that competitors are moving into other markets or offering new services, 33 percent experiencing new competition from other segments of the printing industry, and 22 percent seeing customers take some wide-format work in house. Price pressure is also unrelenting, with 60.6 percent being price compared more frequently by new and existing customers. This may be reflected in the fact that 33 percent have themselves been aggressive with financing and payment terms, and 23 percent have more aggressively used rebates and price promotions. Strain on the supply chain is not restricted to price, with three quarters of respondents citing intensified pressure on production speeds or turnaround times.

"The FESPA Economy Survey, first undertaken in Spring 2009, sets out to measure the impact of the economic downturn on the wide-format community, and to understand how PSPs are responding to the challenging trading conditions. These latest findings stress the need for printers to offer services that stand apart from commoditized print offerings. As our FESPA 2010 ‘Catch the Wave of Innovation' campaign highlights, in tough economic times innovation can be a key competitive advantage and survival skill. Cutting prices to match the shop across town is not the answer. Printers will thrive when they offer services and solutions that help customers execute their marketing and retail campaigns more effectively," said Marcus Timson, FESPA.

Along with service and market expansion and new sales strategies, the survey points to a gradual refocus on developing and retaining 'human capital'. 22.9 percent of respondents have expanded their sales force, and talent retention would seem to be a priority in anticipation of an eventual upturn, with respondents preferring to cut staff hours or reduce pay rather than resorting to losing valued individuals.

While survival mode has diluted the industry's environmental focus, with 59.6 percent stating that environmentally sustainable production was less important as a result of the economic downturn, a remarkable 40.4 percent of respondents reported that the economic backdrop has not made 'planet-friendly' printing any less important. A fifth of respondents use sustainability as a point of competitive differentiation, suggesting that there are opportunities to innovate in this area, which more PSPs may seize as the economic outlook continues to improve.

"The economic downturn has accelerated demand for higher service levels, so it's important for PSPs to be flexible in responding to profitable opportunities. While the requirement for faster and more capable equipment has become a given in the wide-format market, the research tells us that new markets and new application areas are what most respondents are looking for during this economic downturn," said Tim Greene, director, Wide-Format, InfoTrends. "This industry is essentially symbiotic. Innovation from suppliers can help PSPs to develop proactive growth strategies and achieve success, which in turn leads to improved business for those suppliers. In this way, innovation can create a virtuous circle, making focused events such as FESPA 2010 a vital catalyst to future growth."

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