Tuesday, June 4, 2013

Where is the Large-Format Market Headed?

Interesting article!


Just this week the latest IDC report on shipments of large format printers (LFP) was announced. While Japan with positive year-over-year (yoy) results in terms of units shipped (1.2%) and shipment value (1.7%) is doing fine, worldwide the LFP market declined 12% yoy on shipments in the first quarter – and this after IDC already recorded a decline in the third quarter 2012. While not only Japan, but also the US, coming second, recorded growth, the worldwide shipments of 45,900 units in Q1 of this year in the larger application segment still indicate a contraction of 5.6%. In the graphics application segment, the decline even was at 20% yoy. IDC pointed out that all regions recorded a decline whereby "Latin America has been the worse impacted region with a 40% decrease in shipments".

Should this tell us something I am asking myself?

Well, let's look at the picture: Large format printing moved mostly from analogue – screen printing – to mostly inkjet – digital printing. This enables printers to act on a moments notice on customer requirements. And for some time now, large format printing has been touted as a growth area – one that could complement commercial printing businesses while at the same time sustain growth for lfp only shops.

On the other hand, the market for large format printing is also an Achilles heel for many printers: Yes, the tendency is there to invest in digital LFP and everyone recognizes it. But as in every business there is a limit as to how much and how big a market can grow. If everyone would jump into this segment, then the competition we already experience in book printing, commercial printing and other areas, will just be as big. There is a point when a market is saturated and a downward spiral is generated. Early adopters that already are in the market as well as pure large format print shops are okay, as long as their neighbour will not start investing in the same niche market that they are already in. Especially in large format printing customer loyalty is high as the variety of digital machines offers each and every customer to choose the printer and capabilities that match their orders.

Several LFP manufacturers have already shifted their focus – or better said, enlarged their offerings towards other applications such as packaging. But even here we need to distinguish. If everyone now moves towards these new applications, then we are building another crowd resulting in a downward spiral.

Every print service provider needs to carefully evaluate his choices, his business and then move towards a solution that can differentiate him from his peers and neighbours. Offering innovative applications, solutions, even services that let him stand out. This does not mean that one should not invest in large format printers anymore – in contrast.

A new shiny digital device that can do what all others in that print ship can do, will just cater to higher productivity but will not enable new offerings. State-of-the-art printers that can output different offerings should be sought. But please beware you will have to have new applications on your mind, new products and new offerings. While many of the manufacturers already will again show a multitude of applications at Fespa – new and innovative – remember that every visitor will see those. And chances are that your competitor has seen those too. However, if you do have a certain application on your mind – new and your own – then look for a printing device that can realize those and go for it. More applications, different applications and most of all your services will beat the competition, especially if in addition you are also offering personalized products, efficiency and fast turnarounds. The manufacturers of large format printers can give us indications etc., but to develop applications is the task of the print service provider as he knows his clients and what they might require or except as next product in their portfolio.

For years now, offset printers have been told to look at large format printing to complement their business and some have invested. However, if you are just starting to look at large format and have not yet – up to now – offered those services, beware. Your competition will be fierce, as the long time market participants will not give up their playing field easily.

But let's get back to the initial question: What does the decline in large format printer shipments mean? Has the market already peaked or is about to peak? Truth is, that digital i.e. non-printed signage is taking on more and more room. If you look around at airports, railstations, motorways and even garages, fuel stations – digital signage has in most places already replaced printed large format products. Digital signage evolves more and more. Looking at the recent snow storms in the US, Nemo and Sandy or at the Boston marathon bombings where police and other authorities constantly posted updates on billboards, informing the population of imminent danger and such, this information could not have been conveyed by traditional billboards. Some countries, such as Australia, regulating building wraps, Japan regulating the amount of digital signage or the UAE where digital signage at roads is considered to distract the drivers, have already taken stands for or against one of the technologies. However, the more digital devices we are using in our cars in our environment, the more we are getting used to it. And while large format printing can provide added value that cannot be offered by digital signage, the last has other advantages that cannot be catered for by traditional printing processes. Even PoS has already adopted digital signage conveying messages alongside printed signs in shops, malls and nearly everywhere where customer contact can or should occur and engage. It seems to me as if each and every of those applications will eventually find their "right" technology to benefit from.

Meanwhile, we will have to look at the whole market in order to define ourselves and our offerings so that we can serve our clients and customers better with even more diverse innovative products.

And just like in real life we will see a lot of these at Fespa.

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