Opportunity Awaits in Small Commercial and Quick Printers’ Market

Based on PRIMIR’s recently completed study, “Small Commercial and Quick Printer Study 2006-2011,” in which more than 300 small or quick printers were interviewed – a world of opportunity awaits.

Revealing their overall optimism, 84% of the surveyed respondents projected their revenues would be higher in 2011, and 72% expected higher profits as well. According to John Zarwan of J. Zarwan Partners and Cary Sherburne of Sherburne & Associates, who conducted this PRIMIR research, the survey reveals good news for a market segment that has seen steep declines in the number of establishments and experienced flat to declining shipments over the last several years.

The study exposed that one of the greatest threats to the small commercial and quick print segment is the increased capability and prevalence of in-house copiers and printers, which are siphoning off the work that these firms typically produced in the past. As a result, many small commercial and quick printers are seeking to both broaden and provide more sophisticated offerings in order to capture the more complex types of work that their customers are less likely to produce in-house.

According to the study results, “At a high level, several trends have clearly emerged – trends that we know apply to the printing market as a whole, but many of which were erroneously perceived as perhaps less likely to affect the small commercial and quick printer as heavily as they have affected their larger brethren.” Foremost among them:

• Analog is out and digital is in. While there will continue to be a market for analog products, including presses and consumables, there is a clear shift in this market toward a digital future.

• The increasing penetration of computer-to-plate. Over 50% of our sample is already using some type of CTP, including polyester, metal and DI. Implementation is more prevalent among quick printers than among small commercial printers. This is perhaps one of the biggest opportunities for vendors and printers alike in this market – to hasten the adoption of CTP and direct-to-plate by this segment, which has understandably been slower to adopt than larger firms.

• Demand for 4-color printing is growing, and so is the interest among small commercial and quick printers in buying 4-color output devices. This need is most likely to be met with the purchase of a digital output device (color copier/printer or digital press) or acquisition of a DI press than a conventional 4-color offset press.

• There is still significant life in the world of black & white digital printing. Three-fifths of the small commercial and quick printers surveyed plan to add these devices to the mix over the next five years, with half either replacing existing devices, increasing capacity or upgrading capabilities.

• Wide format printing offers growing appeal in this segment. More than half of the respondents are considering purchases within the next five years.

• Overall printing industry run lengths have sharply declined. This segment is well positioned to economically accommodate smaller jobs and is not only less affected by this overall trend than the market as a whole, but perhaps is better positioned to capitalize on the trend.

• Small commercial and quick printers are increasingly more focused on sales-driven corporate work for their livelihood. This trend will continue into the future; the most frequently mentioned business-changing investment was to hire more salespeople.

• Increasing numbers of small commercial and quick printers will have an Internet presence. Although today only 12% of business comes in via the Internet, two-thirds of survey respondents plan to invest in Internet store-front technology over the next five years.

• Small commercial and quick printers will be investing in back-end bindery and finishing processes in greater numbers. Back-end bindery and finishing processes are certainly not coming in last in the eyes of the survey respondents; three-quarters plan to invest in their bindery over the next five years.

As the speed of doing business in today’s digital world continues to accelerate, and technology becomes more complex, it will be increasingly more difficult for smaller independent printers to keep up. Franchisees and national brands have the advantage of being able to amortize investments in research and development across a large number of centers, and those locations can take advantage of the knowledge and expertise of the parent organization with less expenditure of time and money.

The study revealed that revenue streams for small commercial and quick printers are quite diversified; surprisingly, they do not rely on any particular type of work. Overall, small commercial printers look much like quick printers, franchisees like independents, and larger plants like smaller plants. While digital and offset printing still account for the majority of revenues, small commercial and quick printers are adding a range of products and services that provide opportunities for differentiation, both from each other and from in-house and “big box” competition. This will become even more challenging over the next five years, as price/performance for in-house printing capabilities continues to improve and the national brands (office supply superstores and FedEx Kinko’s) work to deliver increasingly sophisticated levels of service to go along with their convenient national footprint.

With more than 22,000 locations today in the U.S. and Canada, perhaps declining between 10% to 20% by 2011, the small commercial and quick print segment is still an important part of the overall printing industry, accounting for more than $13 billion in print and associated services. Based on this research, this is a market segment that should be of great interest to PRIMIR and NPES members. Significant opportunity exists for NPES members to capture business opportunities as this important segment continues to evolve by deploying innovative sales and marketing strategies, blended with targeted market education and product development strategies and special financing aimed at the needs of this smaller market. New businesses will continue to become established in this space, and many of today’s successful small printers will become the mid-sized printers of tomorrow. It is a vibrant, yet challenging market well worth focusing upon.

The “Small Commercial and Quick Printer Study 2006-2011” is solely available through membership in PRIMIR. For more information contact Jackie Bland, Managing Director of PRIMIR/NPES at e-mail: jbland@primir.org or phone: 703-264-7211.