By Inga Leder, Content Writer, Printbox
The global pandemic has turned the entire economic order upside down without sparing the photo printing industry. All previous forecasts turned out to be simply inadequate to the new challenges.
Based on the collected data, Printbox, the enterprise photo products software provider, has prepared an analysis of the results and predicted future trends. In this article, we discuss:
- How were the sales of photo products in 2020, and how did they differ from the results achieved in 2019?
- Has the several-month lockdown influenced the behavior and preferences of consumers?
- What trends developed after the pandemic that will affect sales in 2022?
Fast Forward to 2019
2019 was the year of continuing digital transformation, and the photo printing industry was no exception. Before the pandemic crisis broke out, the global photo printing and merchandise market was expected to grow with a CAGR of 7.1% from 2019 to 2027, starting from 2018 with a market value of US $22.60 Billion.
According to Printbox analytics in 2019, photo books were the products that triumphed in terms of the largest sales share. On average, they filled over 60% of all photo items sold, and only in December they were overtaken by photo calendars. The second most frequently chosen product by customers was wall décor with 13% share. The prints took third place in the sales statistics for photo products, with a peak in November & over 17% share in total sales.
2020 Global Collapse, but Acceleration in Photo Printing
The sudden global lockdown in the first quarter of 2020 meant irreparable losses for many printing companies. Businesses that supply fairs, exhibitions, or events such as weddings, had been hit particularly hard. Most assignments were canceled at the last minute or postponed for following years.
The world locked down and our lives went almost entirely online. As a result of domestic isolation, people were looking for alternative forms of spending free time, which also translated into more online shopping.
In 2020, the growth of the global e-commerce market was 25.7%. According to Printbox data, total customer sales increased by approximately 16% during this time. The pandemic period also saw an increase in customer retention. The difference in the share of returning customers in total sales between the pandemic’s outbreak in 2019 and the corresponding period in 2020 was over 90%.
Results of 2021 and Prediction for Industry Peak Season
Following last year's boom, the industry has slowed down. Gradual declines, with the results not lower than in 2019, began in April 2021. Predictably, the lack of travel and social activities reduced the number of photos taken in 2020 by 15% compared to 2019. Currently, in Q4, the situation is stabilizing.
Due to the restrictions in traveling and organizing events in 2020, the amount of photo book orders decreased. Their share in the total number of orders in 2021 was approximately 40%. On the other hand, the sales of single prints have increased, which on average this year is over 38%. Ever since the tourism and event industry took off again, we can see a slow return to the results achieved before 2020. As Printbox data shows, October 2021 results were again above the outcomes of 2019, proving that the industry is about to rebound just before the Christmas peak season.
What is crucial, photo printing companies in the post-pandemic era are not only subject to the trends of their industry but, above all, dependent on the forces in the e-commerce sector. According to McKinsey Global Institute analysis, the e-commerce has grown 2 to 5 times faster than before the pandemic.
Trends to Watch in 2021, According to Printbox
Based on market data and predictive analysis conducted with its clients, Printbox has distinguished 4 directions on which it is worth focusing your attention when running your photo printing business in 2021 and 2022.
1. AI-based photo book creation
The digital transformation has made it possible to create tools that shorten the time needed to design a book almost 5 times. Photo printing companies have realized that the use of AI in photo album software can empower their customers and help them when they need it, much faster than before.
An example of such a solution is Printbox Smart Creation, which allows shortening the time of creating a photo book project from 5.1 days (for manual creation) to 1.3 days (using smart algorithms).
AI should support end-users by helping them in areas where they need it, such as the tedious process of selecting photos. According to Kasper Rybak, Product Owner in Printbox, the greatest advantage of the latest AI-driven photo album software is that it creates not only plain white or black books. It quickly delivers a beautiful, unique project with plenty of clip art, backgrounds, text fields, and other items.
Artificial Intelligence is a phenomenon evidenced by the largest players in the photo printing market. One of the most recognizable brands implemented the smart autofill feature in editors, which automatically places users’ photos in their photo book pages in chronological order.
2. Boom in mobile sales
Mobile e-commerce is up and poised for further growth. In 2019, the share of the mobile channel in all online sales was 63.5%, and in 2021 it is projected to reach 72.9% (according to Statista.com).
Based on Printbox data, the median of mobile traffic for the customers of this photo product software provider in 2021 is 19%.
In this context, it is crucial to consider two issues: Responsive web design (RWD) and dedicated mobile apps.
A RWD approach and optimizing the site for mobile is now a new golden standard. When a user switches from a laptop to a tablet or smartphone, the site should automatically shift to accommodate the resolution, image size, and scripting capabilities.
The share of users placing orders using mobile is constantly growing. According to Printbox data from 2019, the number of projects rendered in the RWD editor was 10.73%, and in 2021 it increased to 15.43%.
The second element of mobile presence is application. It should be highly efficient, have properly designed purchasing paths, as well as functionalities dedicated to this sales channel.
3. Protection against supply chain disruptions
Closed borders and national lockdowns had an enormous impact on the functioning of the business. They have caused significant disruptions to production operations and supply chains. Global distribution channels have been disturbed, while demand has remained the same, or even increased.
Consequently, trading in brick-and-mortar stores was changed to different business models and adapted to new conditions. At the same time, most online stores started making more improvements to increase their efficiency.
Photo printing companies are seeking for diversifying their offerings and supply chain options to avoid bottlenecks and also mitigate the effects of general industry volatility.
For e-commerce businesses, this means that they need to modernize their inventory and order management systems to improve integration with supply chain partners and deal with market shocks and uncertainty.
4. Moving from open source to SaaS
Currently, about 70% of companies rely on open-source solutions. Their chief advantage is the fact that, in theory, they are free. However, there are a lot of associated costs, such as hiring employees for service or the development of teams. With the increasing employee turnover, it is becoming increasingly difficult to maintain the stability of open-source solutions' development and maintenance.
SaaS e-commerce platforms are hosted and maintained by their provider, then licensed out to merchants to use. Users access these applications via web browsers and pay a monthly subscription fee. The major benefit of SaaS platforms is that the software isn’t installed on-premise or maintained by the user. Instead, the provider builds, hosts and maintains the software on their own servers.
The SaaS market is currently growing by 18% each year and, by the end of 2021, 99% of organizations will be using one or more SaaS solutions.
Although open-source solutions are still more popular, we can see that in 2020 SaaS solutions recorded the highest growth and this trend will continue in the coming years.
Certainly, we can interpret industry data and reports in different ways, because such a global disruption had no precedent in history. It is unknown how the world and the industry will evolve after the pandemic, but we can draw some conclusions from the analyzes performed:
- Global e-commerce statistics show that the coronavirus crisis is likely to speed up existing industry trends. It means that online purchasing and delivery are constantly expanding, and producers of photo products should adapt to this.
- From a vendor's point of view, automation and algorithm support are desirable. The demand for technologically advanced and fully integrated systems is growing, and consumers expect satisfactory results quickly and without problems. We can solve many industry challenges with AI support.
- Returning to a typical business model may be impossible and, above all, unprofitable. Instead of waiting and hoping, companies should transform their own businesses in order to meet the needs of customers and the market. They should diversify their supply chains and revise their technology.