Commentary & Analysis
Is Distance "Dead" in the Printing Industry?
By Barbara Pellow Cataclysmic changes sweeping across communications will tilt the balance between large and small September 6,
By WhatTheyThink Staff
Published: September 6, 2005
By Barbara Pellow Cataclysmic changes sweeping across communications will tilt the balance between large and small September 6, 2005 -- In 1997, economist Frances Cairncross published a book entitled "The Death of Distance." Her key premise was that geography, borders, and time zones would rapidly become irrelevant to the way we conduct our business and personal lives, courtesy of the communications revolution. In her book, Cairncross discusses how the cataclysmic changes sweeping across communications will tilt the balance between large and small, and rich and poor, as they influence where companies locate, what kind of work people do, how governments raise money, and which businesses succeed. There are some key points related to the "death of distance" that are particularly relevant to the world of graphic communications. The Irrelevance of Size: Small companies will offer services that, in the past, only giants had the scale and scope to provide. Manufacturers as Service Providers : Feeding information on a particular buyer's tastes directly back to the manufacturer will be easier, and so manufacturers will design more products specifically for an individual's requirements. More Customized Content : Improved networks will also allow individuals to order "content for one"; that is, individual consumers will receive (or send) exactly what they want to receive (or send) when and where they want it. The Loose Knit Corporation: Culture and communications networks, rather than rigid management structures, will hold companies together. Many companies will become independent specialists; more employees will work in smaller units or alone. Integration between customers and suppliers will strengthen. Cairncross' insight, dating back to 1997, reflects what several printers in the market are experiencing today. This past week, I had the opportunity to interview Gary Ritkes, VP of Marketing for Rex Three Inc. and Doyle Mortimer, VP of Operations from Alexander's Print Advantage, two small companies that are truly benefiting from "The Death of Distance." Rex3 invested in the people and technical infrastructure to position the firm as a leading graphic solutions provider Rex Three, Inc. (Rex3) is a privately held graphic communications service provider located in Sunrise, Florida. The firm is a general commercial printer offering offset and digital sheet fed printing and mailing and fulfillment services. Rex3 also offers a broad array of extended digital services. Rex3 maintains a staff of over 200 employees working 24/7 in a facility encompassing more than 100,000 square feet. Rex3 works on a national level and maintains a client base of Fortune 500 companies as well as independently owned firms. In 1979, Jeff Alexander started what is now known as Alexander's Print Advantage with one Xerox 9400 and a single pallet of paper. By 1999, Quick Printing Magazine ranked Utah-based Alexander's as the 13th largest digital quick printer in the United States. Today, according to Mortimer, "We are no longer a retail copy center. We offer small format digital color and black & white printing combined with full bindery services." As you look at how the businesses of both Alexander's and Rex3 evolved, it is clear that the principles articulated by Cairncross relative to the "death of distance" are reality for them today. Irrelevance of Size Founded by Julius Miller in 1959, Rex3 began as a Photo Engraving business. Over many years, it continued to invest in the people and technical infrastructure to position the firm as a leading graphic solutions provider on a national level. In the 1980s, as Rex3 saw the decline of both prepress and traditional photo engraving, it embarked on making the transition to a full service printing firm. Offerings included design, production, photography, die cutting, packaging, bindery and finishing operations. Rex3 and Alexander's are examples of what leading graphic communication service providers are learning. The 1990's saw significant technology expansion as Rex3 moved into the world of digital asset management, full service mailing and built a fulfillment and distribution center. By 2000, the company offered online ordering and fulfillment. In 2002, its e-commerce offerings were extended to include online monitor proofing. In 2004, direct mail and e-mail campaign management became an area of focus, and in 2005 Rex3 extended its portfolio of service offerings to include digital color printing. With the emergence of e-mail marketing campaigns and related service offerings, Rex3 is tapping into one more concept: In some instances, graphic communications requires the physical distribution of tangible product, but for other applications, an intangible direct marketing campaign can be delivered for its customer base online. Beyond Copies Alexander's has likewise undergone radical transformation from its roots as a retail copy shop. The business is focused on providing print along with the latest technology. It uses both digital and offset presses to offer print on demand; personalized, variable data printing; business printing and wide format. According to Mortimer, "The day that the Internet changes everything has finally arrived." Three and a half years ago, Alexander's developed a solution called Printware. Printware by Alexander's helps customers use the Web to customize, edit, art direct, and print brochures, letterhead, business cards, day planners, calendars, and direct-mail pieces. And that's just the short list. Printware is Alexander's proprietary online print engine that helps reduce the waste, cost, and management time required when companies utilize conventional high-volume printing. In the last 36 months, revenues generated through Printware have exceeded $60,000 per month. Rex3 and Alexander's are examples of what leading graphic communication service providers are learning. Internet enablement changed the competitive landscape. Although targeting different markets, both firms have the ability to sell products and services to a much larger geographic market than ever before. Service Providers plus More Customized Content Rex3 and Alexander's embraced the opportunity through communications technology to offer customers entirely new levels of service. To augment traditional printing, finishing, mailing, fulfillment and distribution, these firms quickly migrated to online services. To augment traditional printing, finishing, mailing, fulfillment and distribution, these firms quickly migrated to online services. For Rex3, its digital asset management solution, RexDAM, gives customers immediate access to their digital files and archives. The server-based asset management system provides 24-hour access to Rex3's production server via the Internet. The ease of secure access allows efficient multi-site collaboration resulting in faster job turnaround and higher customer satisfaction. Clients can request that images be sent via the Internet or burned onto CDs and distributed from the Rex3 facility. Most client systems are set up as a direct URL link through the clients own Web site. This allows the client to use a fully integrated system while not having to take responsibility for ownership of hardware and software. Rex3 is able to develop highly personalized services that encompass printed pieces, personalized Web pages and personalized e-mail. Rex3 also utilizes a real time ordering and inventory system. The system can be used for generating original estimates and estimate-to-order conversion, as well as ordering specific static inventory items. In addition, clients can enter variable data into structured templates and get an immediate online PDF proof. The system provides ongoing inventory management within the Rex3 facility. In addition to actively monitoring customers' inventories, the Rex3 system will provide necessary reports for managing reorders. With the RexDirect System, customers can leverage promotions into one-to-one integrated marketing campaigns. Using the XMPie software suite, Rex3 is able to develop highly personalized services that encompass printed pieces, personalized Web pages and personalized e-mail. Alexander's Printware has also dramatically expanded service offerings for the company. Printware moves the power of customization into the hands of the franchisee or agent--the individual closest to the customer. Through structured templates, users of the system have the ability to: Manage marketing needs efficiently online Protect branding Automate direct mailing Print only what is needed Minimize time employees spend ordering print Find new ways to reach customers with printed materials A perfect example is the relationship Alexander's has with Coldwell Banker. Buying and selling real estate is all about getting the right message to the right audience – at exactly the right time. This is where the pieces of the puzzle come together in one place. Alexander's Print Advantage provides Printware to each real estate agent as a prime opportunity to order, customize and maintain all of their marketing materials online. This benefits the agents as well as their clients. Printware moves the power of customization into the hands of the franchisee or agent--the individual closest to the customer. Like manufactured goods, these services can increasingly be produced at a distance from their final point of consumption. According to Gary Ritkes, "Our business is shifting. Four years ago, about 85 percent of our business was done within the local market. Now the ratio is 75/25." Mortimer indicated that while they still service headquarters locations in Utah, "more than 90% of the work done through Printware is shipped outside of Utah." The Loose Knit Corporation Today's communications technology is an important plank in the platform that helps printing firms develop loyalty, trust and open communications with their customer base. It is reshaping the nature of customer and supplier contracts. Suppliers are drawing directly on information held in databases by their customers and vice versa. Technology is putting customers and suppliers in a relationship where they are tightly integrated. Communications technology is an important plank in the platform that helps printing firms develop loyalty, trust and open communications with their customer base. According to Mortimer, "Over the last 36 months, 40 customers have signed up for their Printware System, and we have five more knocking at the door. Today, all 24 locations are still customers. 80% of them are under contract, while the other 20% have a handshake agreement with us. We have earned their trust and confidence in our ability to meet their needs." Ritkes indicated that there is a high level of satisfaction with the technology and the resultant output among his customer base. "Over the past four years, the work that is in some way Internet enabled has climbed from 10% to more than 50%. Uploads, remote proofing, online collaboration and inventory management are all in regular use by our customers with high levels of assurance that the resulting output will meet their needs." What Does This Mean for You? New ways of communicating are effectively wiping out distance as a cost factor. Printers like Alexander's and Rex3 are proving that the Internet truly is the great business enabler it had promised to become. Customers could easily be anywhere --around the corner or around the world. New ways of communicating are effectively wiping out distance as a cost factor. Graphic communications service providers need to have a clear vision and seize the opportunity in these early days of the death of distance. Please offer your feedback to Barb. She can be reached at: barbara .firstname.lastname@example.org.