Online printers have carved out a big share of the print business today and their revenue share is set to increase. This is partly driven by new companies starting up with an online business model, and partly by traditional printing companies moving into online print. Despite the dramatic growth, it has not always been smooth sailing
Bernd Zipper, founder and ZEO of Zipcon Consulting, provides some insight on the latest developments and trends. Zipcon consulting supports companies in their analog-to-digital transformation related to media. Zipper remembers: “We covered web-to-print from its earliest starts. It was in mid-1995 that I used the term ‘web-to-print’ for the first time in a Seybold article.”
Consulting at Zipcon is mostly strategic, but they also handle implementation, usually performed by external partners for the different tasks required. Not limited to printing companies, Zipcon is helping other kinds of enterprises in their media strategy as well. Zipcon is active in “mystery shopping” for online print products to gauge quality, service, and price. The company covers not only pure online printers, but all kinds of web-enabled media. Their focus is on German-speaking countries, but some global customers exist as well.
Bernd was also a driving force behind the “Initiative Online Print,” a dedicated association for online print. The initiative started to overturn a patent on the general concept of ordering printing online. After that patent was invalidated, it turned into an industry association for networking, lobbying, and general information exchange. The current 45 members represent an annual revenue of €4.6 billion.
Impact of the Pandemic
The pandemic did impact the printing industry massively and 2020 was a difficult year especially for pureplay online printers. Some printers lost 70% of their revenue overnight when countries went into lockdown. By nature, most of online print is based somewhat on discretionary spending and less on scheduled and repetitive publications. The effect was that customers simply stopped spending as their business activities came to a halt.
Since then, volumes have recovered, but revenues are still currently 20–30% lower than pre-pandemic levels. Most impacted was commercial print, especially for B2B customers, while packaging continued to do well.
Bernd Zipper expects that volumes will recover to 5–10% below the pre-pandemic level in the very important year-end business. Previous print volume levels will not be reached again, as the economic outlook is still uncertain. He also reckons that there was some education undertaken by customers during the pandemic. For example, customers realized that they could order print small runs on short notice to react quickly, instead of mass printing and inventorying, which comes with the risk of obsolescence. Print-on-demand has been propelled by the COVID-19 pandemic.
In Q3 2022, the situation should normalize, but still at a somewhat lower level than before the pandemic. Instead, on-demand print will result in reduced total volumes, more mass customization will be deployed, and print will be more targeted, which at least will drive the price per page.
The COVID-19 pandemic has been a boon for B2C-oriented businesses however, as consumers had time to experiment and to learn about photo print and merchandise. With an average increase of 18%, companies focused on B2C print did much better than B2B printers. Bernd Zipper expects that this is not going to be a one-time effect—consumers now learned about customization opportunities and the ease of ordering print. Social media selling is a driver of B2C print and printers are realizing this now. Simple promotional products attract consumers and get them started—which they will only expand into further.
Converging Business Models and New Applications
As the market matures, business models in commercial B2B print are converging now. There are rarely pure online or classic printers left today. Practically all traditional printers have now a web portal, more or less complementing or replacing the traditional working relations with existing customers. The first wave of these portals is now being replaced by newer, more service-oriented portals which help them expand their online presence. On the other hand, many online printers are stepping up their service offerings and forming key account groups.
Moving into online print is not necessarily a matter of company size. Small printers can still serve niche or local markets by transferring their traditional customer relationships to online models. Also important is a trend towards printing locally, as many customers suffered from distribution problems lately. The intimate customer knowledge that smaller printers have helps them keep their customers happy. With their intimate customer knowledge, smaller companies are in a better position to consult on and provide a range of print and non-print media solutions.
Moving into Investment Mode
While the industry is still suffering from the pandemic, some online printers started investing again. Bernd Zipper does not expect online print companies to be able to form monopolies. But the companies with full investment coffers are already planning for the post-coronavirus period and are vying for a good starting position to benefit from growth opportunities. One target is digital print for small batches and ultra-fast turnaround. Printers are also trying to diversify. After doing well during the pandemic, short-run books as are often identified as a new opportunity. Labels and packaging are the next target, and this typically requires new equipment. While commercial print is stagnating, label and packaging print are set to grow further. Of special importance is an increasing interest in short-run printing. The growing number of channels, retail and online, market diversification, and boutique brands require smaller batches. Those have to be handled via web-to-print to be produced efficiently.
Unfortunately, there are some obstructions coming up. Material shortages and rising prices for supplies are causing major headaches. This could stifle recovery, as pricing is competitive and fast delivery is expected. Printers will need to explain why print prices will be rising now.
Trends in Online Print
There are some top trends singled out by Bernd Zipper, which are shaping online printing now and into 2022:
- Mobile first has to be a strategy for any online printer. A mobile interface will be a given for any e-commerce shop—and print will be no exception.
- Improving the service is key to customer satisfaction. Even pure online printers open up key accounts to improve customer loyalty and serve their top customers better. There will be faster delivery options as well.
- Web shops will be more customer group-targeted. This can lead to customized web stores according to the target segment—even those with their own brands for certain customer groups.
- Social selling is driving revenue, especially in B2C. The print revenue generated through social media selling is going to increase by 30% in 2022.
- Trade barriers can offer new opportunities: there is Brexit, but also dealing with non-EU-countries like Switzerland makes cross border trade more complicated. This opens up opportunities for local printing.
These trends and possibly more will be closer revisited at the next Online Print Symposium. Initially targeted for September 2021 the date has been moved to April 28 and 29, 2022 in Munich. The later date should also give more international visitors a chance to attend.