Commentary & Analysis
Digital Should Drive Service Transformation
Versioning, the use and integration of digital displays, eye-tracking, point-of-purchase displays, mobile technologies, and payment software, “virtualization”—where a company offers a particular printing service but outsources the actual production, and printing as a service are quickly becoming the status quo in the wide-format printing business.
By Tim Greene
Published: September 17, 2014
Did you know that there is a difference between goals and objectives? While goals are long-term, objectives are short-term. To prosper in today’s graphic communications market, print service providers (PSPs) must be able to satisfy their clients’ objectives and meet their longer-term goals. A customer’s objective might be to execute a certain marketing campaign and do it cost-effectively. That customer’s goal would be to grow market share and increase profitability. Businesses that offer wide format digital printing services encounter this type of situation every day. If a customer calls you and requests 25 posters by tomorrow, s/he is trying to satisfy an objective. This is a transaction. If a customer asks for advice and ideas about rebranding the interior of a store, s/he is trying to accomplish a goal. This is a relationship.
Wide-format digital printing is a growth market, and numerous printing technologies are steadily evolving to meet the objectives of print buyers. Companies in the wide-format business (and those who hope to become involved in it) have a wide array of options in terms of production technologies—everything from Latex to dye-sub, from rollfed to flatbed, and from $5,000 photo-quality aqueous inkjet printers to multimillion-dollar high-speed UV-curable printers. The best option will differ based on a variety of internal and external factors, but one thing remains constant: the most profitable wide-format shops are the ones that sell based on relationships as opposed to transactions.
Companies in the signage and graphics market that are selling a high percentage of their offerings on a transaction basis are typically manufacturing-oriented. Firms that sell on a relationship basis certainly have a manufacturing capacity, but they are actually service companies. InfoTrends believes that this is one of the biggest factors that print shops overlook when they think about “going digital.” Some wide format shops seem to think that acquiring a digital printer means that they have gone digital, but there is actually much more to the equation. Truly going digital involves using digital printing and digital workflows to help meet your clients’ business goals, and these objectives almost never involve “more printing.” When it comes to signage and graphics, your customers’ objectives will typically include better and more accurate brand representation, faster and easier graphics fulfillment that reduces demands on their field or in-store personnel, increased revenue through more effective adverting and target marketing, better ways to measure the impact of advertising expenditures, and reduced costs.
Digital printing and digital workflows can be applied to higher-margin services, which move the entire organization toward a service model rather than a manufacturing model. InfoTrends would suggest that many signage and graphics print service providers have already transformed their own business practices (e.g., inventory management) to the service model, where they buy only what they need when they need it. According to InfoTrends’ Disruptive Supply Chain Strategies Study, dealing with this tight supply chain has been one of the biggest challenges that today’s businesses face.
Holds no inventory
Produce on demand/to forecasted levels
Tailored to customer requirements
Tries to automate tasks
Requires specific knowledge
Requires physical location
Can be virtual
When it comes to customers, we are seeing a shift toward using big data to customize communications with particular audiences. This has become known as versioning in the signage and graphics business, but InfoTrends believes that the use and integration of digital displays, eye-tracking, point-of-purchase displays, mobile technologies, and payment software will increasingly influence commercial messaging. Signage and graphics suppliers, and anyone else that wants to play a role in the market, should most certainly educate themselves about these technologies.
Digital is also transforming the requirement for labor in the signage and graphics business. We have seen multiple shops that have one operator running multiple devices. Multiple operators would have run a single device in the past, but the streamlined digital supply chain reduces the cost of warehousing and inventory management. Thanks to increasing levels of automation in the wide-format business, there are even more opportunities to improve productivity and offer higher service levels. What’s more, this is what customers are increasingly expecting.
One of InfoTrends’ recent studies illustrated how digital is impacting the concept of location. Among 300+ companies that offer wide-format printing services, over 40% reported outsourcing wide-format print production. The service is offered, but the actual production is outsourced. This is known as virtualization.
While manufacturing companies make tangible products, service companies make intangible products. Shops that go digital must develop ways to get paid for the application of their digital processes. They can do this by promoting the intangible benefits of their services, and this involves measuring improvements based on the accomplishment of clients’ goals and objectives.