Commentary & Analysis
Future Wave: Exploiting Niche Markets
By Ed Marino of Presstek May 5,
By WhatTheyThink Staff
Published: June 5, 2006
By Ed Marino of Presstek May 5, 2006 -- A recent Trendwatch Graphic Arts Fast Fact reported that, according to its 2005/2006 TWGA Printing Demographic Atlas, commercial printing establishments classified as "other" grew by 9.2 percent from the previous year's Atlas, even as commercial print and prepress establishments overall declined by 4.1 percent. Printers in the "other" category, according to Trendwatch, include commercial printers that produce specialty products like labels, tags, tickets, etc., using a variety of printing processes. Trendwatch points out that while the number of establishments is small in the overall picture (2,541 in 2004/2005 growing to 2,774 in 2005/2006), their growth indicates that the printing industry is gradually becoming less about mass production and more about exploiting niche markets. For many shops, the best success has come by focusing on a small core of specialty products rather than a wide array of general purpose print products. The printing industry is gradually becoming less about mass production and more about exploiting niche markets. How does your firm match up? Are you still doing what you've always done, or are you branching out into specialty or niche markets that are delivering growth for your business? Which category do you fall in--the 9 percent plus growth or the 4.1 percent decline? Regardless of where you are in the spectrum, it is not too late to shift the balance to even more growth and profitability. Transitioning to Growth As we have been saying in these columns, the key to business growth for the printing industry is a transition from analog to digital production processes--and that is across the board, from the time the customer is ready to submit a job, all the way through its production and preparation for delivery. In addition, inherent in these specialty and niche applications are shorter run lengths that are virtually impossible to produce competitively and profitably using older, conventional processes. It is not too late to shift the balance to even more growth and profitability. So where does that leave you as you think about next steps for your business? Here are a few thought-starters that will be helpful as you consider the future. * Are you already producing specialty/niche products for current customers, and could you expand these offerings to other customers? For example, are you producing newsletters and other custom publications for current customers? According to the Custom Publishing Council, Corporate America produces more than 116,000 unique custom publications annually and spends $30 billion each year doing so. What can you do to get a larger piece of that pie? * Do you store materials in an easily accessible repository so that customers can easily order reprints? This type of service tends to lock in customers and ensure a recurring revenue stream as materials are ordered for print on demand. While nearly 80 percent of print runs are now under 5,000, according to most industry sources, how many of those runs are simply one-off transactional print? Take a look at the jobs you have produced over the past several months and see if you can find opportunities to leverage standalone jobs into program-based work that will deliver that recurring revenue stream. Look for opportunities to leverage standalone jobs into program-based work that will deliver a recurring revenue stream. * Do you have a plan in place to increase the digital content in your production portfolio? Unless you are already a fully digital shop, having this plan in place is critical to your future success. As you think about the specialty and niche products that your customers and prospects would be likely to purchase from you, what equipment and other infrastructure must you have in place to meet those demands? At a minimum, you should be supporting your presses with digital platemaking. But don't forget about the complementary value and range of applications enabled by a blend of direct imaging (DI) offset and toner-based digital printing. * Do you have a unified workflow in place that will allow you to make late-stage decisions about when and where to print a particular job? With the shorter runs, faster turn times and increased number of jobs demanded in today's fast-paced marketplace, the more flexibility you can introduce into the workflow, the more successful you will be. The more flexibility you can introduce into the workflow, the more successful you will be. * How about color management? While you may once have been able to afford the luxury of having an expert pressman tinker with the color during the makeready process, that is no longer an option if you want to stay competitive. Minimizing makeready is a key element of profitability in a short-run business. Make sure you have the right level of automation and the right tool set in place to keep your makeready times--and consumption of materials--at an absolute minimum. * As you think about acquiring new printing capacity to address an increasingly digital workflow, make sure you investigate the flexibility these devices have relative to substrates. The more flexibility you have--that is, the wider the range of substrates you can handle--the more easily you will be able to expand your specialty and niche options. Can you print on static cling, vinyl, lenticular substrates, polycarbonate such as Lexan? These types of substrates will open up new avenues of specialization and allow you to gain more work from existing customers while at the same time going after new customers. The more substrates you can handle the more easily you will be able to expand your specialty and niche options. These are the types of strategies being adopted by today's successful print service providers. Take the time to take a look at some of them online, and even order some printing to see how it goes. If you haven't done so, you will be in for a surprise. Check out www.vistaprint.com, www.printingforless.com, www.psprint.com, www.diggyPOD.com. These are a few examples of printers who have capitalized on the new digital model and entered into specialty/niche markets. And believe me, these firms are experiencing growth rates far in excess of the averages cited by Trendwatch. Take the leap and join them in the digital future.