Harnessing Your Business Investments

At PRINTING United Expo, the keynote session “Harnessing Business Investments to Increase Profitability and Competitive Advantage” drew a great crowd. Nathan Safran, vice president, Research, was joined by his colleagues Lisa Cross, principal analyst, both of NAPCO Research; and Andy Paparozzi, chief economist at PRINTING United Alliance, joined via video.

"The state of our industry is positive, it’s bright,” Paparozzi noted as he kicked off the overview of the market. “Our industry’s unforgiving business environment is elevating both a return to making the right business decisions, and the costs of making the wrong ones.”

Making the right investment choices is essential for profitable success and sustainable competitive advantages. Meanwhile, the wrong decisions deplete resources, fragment operations, and undermine core capabilities.

To that end, here is a closer look at some of the key metrics and trends they are watching as we start to gear up for 2025 — and how you can use this information to position your business for success.

Charting the Trends

From the latest State of the Industry report, Paparozzi noted that between a modest growth of sales and prices for the first have of 2024 combined with a much larger increase in operating costs due to inflation, the reality is that many participants in the ongoing research actually saw their real, adjusted sales numbers decline. That, in turn, has led to many reporting their profitability for the first half of 2024 was actually lower than the same time last year — a telling look at just how much of an impact inflation is having.

To counter this, Paparozzi noted that printers need to be looking at investments that will help reduce those costs, if not outright remove them from the equation. Equipment that is faster and more productive, more integrated automation from end-to-end, and even better solutions to help fine-tune estimates can all help shops do more with less.

Some of the investments participants in the State of the Industry research noted they believe will be key to their future success include applications with more artificial intelligence (37.1%); upgraded bindery and other finishing equipment (34.3%); more integrated workflow software (30%); upgraded digital infrastructure, such as workstations, servers, and networking equipment (30%); and more advanced eCommerce solutions, such as more robust and integrated web-to-print solutions (28.6%).

Of course, there are a number of other trends that are already having a major impact on print providers of all types and sizes, and those aren’t showing any signs of slowing down. A few of the trends highlighted include:

• Safran noted that the boundaries between types of printers have already been eroding, and that is only gaining momentum, not slowing down. “It’s moving from the theoretical to the practical,” he said. More and more printers are looking to be the “one-stop shop” for their customers, which means meeting them wherever their needs take them — that could be direct mail, it could be fleet graphics, it could be apparel, it could be packaging, or it could be a number of other applications. Printers who anticipate those shifts and ensure they have both the equipment and training to stay ahead of those changes will be the ones that thrive in the coming months and years.
• Artificial Intelligence (AI). It seems like you can’t turn around these days without hearing about AI, but the reality is that print is no different than any other industry. You can resist it as much as you want, but those who embrace it and find ways to make it work for them are going to be far better positioned for the way the world does business in the very near future. Content creation is perhaps the most controversial use, and the one you hear about on the news most often, but it’s not the only way AI could impact your business. Other applications include everything from marketing and sales, to analytics, to improving operations, to evaluating risk management — and that just scratches the surface. “The industry is still learning to harness AI’s power,” Cross noted, but she cautioned attendees not to make the mistake of thinking you can ignore AI and still have a robust and profitable business for years to come.
• Hand in hand with AI is automation, which is going to be a key driver of profitability for printers as margins continue to shrink and costs continue to go up. Already, 77% of printers report they are automating at least some portion of their workflow, and 64% are in the process or re-tooling operations as we speak to increase automation and productivity.
• Labor Challenges. Everyone is feeling the squeeze on the labor front — not only is it getting increasingly difficult to find good people to begin with, once you do the costs for retaining them are continuing to rise as well. That is not a trend that will go away, so printers need to find new ways to address those problems. “Two thirds of sign and graphics providers say hiring sales staff is a challenge,” Cross said. “Automation is one part of the solution, yes, but it is also about building a culture where people want to come in to work and stay with your operation long term. Competitive wages are, of course, part of it, but it is also about providing the right mix of benefits, having a clear path for continuing education and advancement, and cultivating a culture where excellence is recognized and celebrated."
• Today, 69% of print buyers note that sustainability plays a key role in determining who they purchase their materials from. Further, 91% note that they believe sustainably produced print will be even more important to their company’s future than it is even today, and they are carefully examining a printer’s “green” programs and comparing them before making any decisions. Printers who want to remain competitive must start investing in sustainable equipment, consumables, and processes sooner, rather than later.

Safran wrapped up the session noting that convergence is reshaping the print industry, which presents new challenges, but also brings a plethora of opportunities for those willing to take the leap and invest in the right equipment, people, and processes to set themselves up for success not just tomorrow, but for many years to come.