The information included in this article is a short summary of the data presented in SGIA’s soon-to-be-released 2013 Market Trends & Product Specialties Benchmarking Report. The data presented is culled from the responses of 136 U.S. sign and graphics producers, and provides an excellent snapshot of the graphics and sign segment today. A full report will be available on SGIA.org later this year.
Companies in General
Companies in the graphics and sign community primarily serve business-to-business customers. More than 85% of companies primarily serve these types of customers, while only 12% primarily serve business-to-consumer customers. Companies in this sector have a wide reach. In fact, more than 50% report serving customers nationally, and nearly a quarter serve international accounts.
The influence of digital printing technology is strong in this sector, and more than 68% of companies classify themselves as “entirely digital” or “multi-technology, but mostly digital,” as compared to the 11% who classify themselves as “multi-technology, but mostly analog” or “entirely analog.” Digitally printed products are produced by 97% of sign and graphics producers, screen printed products are the second most commonly produced, at 53%, and litho/offset products at 27% percent. Other imaging technologies are also used.
While the annual revenue of companies in the sign and graphics community varies widely, nearly 50% of companies have annual revenue of between $250,000 and $5 million. The median annual revenue of a company in this sector is $2,602,500.
Sign and graphics companies serve, on average, 7.9 market areas. Retail stores continue to be the top market area served by sign and graphics companies, followed by corporate branding, food services, and ad agencies. The markets least served by these companies are government and government contractors and manufacturing OEM. Interior decorators/designers/architects is the market seen as growing the most, and print for the trade is the market seen as declining the most. While most market areas remained relatively stable when compared to 2012 figures, a sizable increase in the number of companies serving interior decorators/designers/architects has been noted.
Sign and graphics companies serve, on average, 12.8 product areas. Banners, indoor wall graphics and window displays are the product areas most served by sign and graphics companies, followed by point-of-sale and vehicle graphics. The product areas least served are plaque/award/trophy and awnings. The product seen as growing the most is indoor wall graphics, while the product seen as declining the most is billboards. While year-to-year change in most product areas has been marginal, strong growth in the number of companies serving vehicle graphics, building graphics, and environmental graphics has been noted.
Building the Business
Sign and graphics companies undertake a wide variety of methods in order to attract new customers. The most popular of these continues to be referrals, followed by a company Web site and outside sales. Classified ads, purchased sales leads, and purchased online banner ads were the methods least used.
When companies seek to improve competitiveness in their production efforts, they are most likely to do so by adding new product lines, reducing operating costs, and becoming a “one-stop shop” for their customers. The least used methods in this area were the adding of fulfillment capacity and the use of offshore purchasing.
Companies seeking to improve competitiveness through sales and marketing efforts were most likely to increase their Internet presence, maximize their value to current customers and develop new markets. The least used of these methods was mergers and the creation of subsidiaries.
With finishing technologies being one the of the key tools companies use to complete many graphic products and differentiate themselves in the marketplace, it is not surprising that more than nine out of 10 (91.2%) sign and graphics companies offer finishing/post-production services to their customers. Of those services offered, the most common are lamination and grommeting, followed by installation and mounting. The finishing services least offered were doming and vacuum forming/molding.
Work with Other Printers
A great many companies work together either selling services to, or purchasing services from, each other. Two-thirds of sign and graphics companies provide production services to other printers, and slightly more than half provide finishing/post-production work to other printers. Conversely, more than two-thirds purchase production services from other printers and—again—slightly more than half purchase finishing/post-production services for other printers. These types of arrangements allow many producers broader market product/access than their in-house technology or capacity would normally allow.
Just a Bit More
The information presented in this article is (up to this point) quite data-driven. But before this offering comes to its thousand-or-so-word completion, I wanted to make an observation that goes just a bit beyond the data. In the upcoming SGIA report, data is presented on 15 market areas and 25 product areas. Among market areas, a majority are served by more than 50% of sign and graphics shops; among products, more than half are served by over 50% of sign and graphics shops. The point I’m making here is that companies steeped in wide-format digital are deeply entwined in the potential customer base, and commonly produce a fairly wide variety of end products. Picture it: a company that serves eight market areas and 13 product areas (our averages, rounded up) is able to produce as many as 104 possible product/market combinations. That’s reach! Diversity in production plus diversity in customers equals diversity of opportunity.
If you seek to understand the opportunity wide-format digital can bring to a business, then I recommend you get yourself to Orlando this October 23–25 for the annual SGIA Expo to see all that this exciting technology/segment/opportunity has to offer.