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Capturing the Revenue Opportunity
- 1. 1 © InfoTrends www.infotrends.com © InfoTrends Capturing the Revenue Opportunity Tim Greene Director – Wide Format, InfoTrends Kate Dunn Director – Business Development Group, InfoTrends January 2014
- 2. 2 © InfoTrends www.infotrends.com Agenda • Current State of Print for Pay Market • Capturing the Large Format Revenue Opportunity • Next Steps
- 3. 3 © InfoTrends www.infotrends.com $0 $40 $80 $120 $160 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 Graphic CommunicaPons Market is in TransiPon Analog Print Digital AdverPsing & PromoPon Digital Print U.S. Print and Online Advertising Revenues ($B) Segments: U.S. Commercial Print, Quick Print, In-Plant, Data Center, Photofinishing Disrup'on and Transforma'on
- 4. 4 © InfoTrends www.infotrends.com How Can I Grow? Share Gain Emerging ApplicaPons delivery design data! Services & Channels Analog to Digital
- 5. 5 © InfoTrends www.infotrends.com Wide Format Graphics Services Providers $16B+ Wide Format Graphics Copy Shops Comm’l Printers Sign Shops Repro Shops Screen Printers Photo Labs Art Studios In-‐Plants
- 6. 6 © InfoTrends www.infotrends.com • Good growth and margins • Variety of applicaPons and compePtors • Different financial metrics • Many service opportuniPes, demands • Success requires a plan Digital Wide Format PrinPng Market $16.1 $23.6 2011 2016 N. American Digital Wide Format Retail Value of Print ($B) 7.9% CAGR
- 7. 7 © InfoTrends www.infotrends.com All Types of Firms Buy Wide Format Print Services 0% 10% 20% 30% 40% Other (please specify) Media buying organizaPons ArPst Entertainment/Amusement Restaurant or food service Government agency Hotel or other Lodging Financial services Personal services Healthcare provider EducaPon Real estate ConstrucPon Non-‐profits Manufacturing Professional services AdverPsing Retailing N = 310 Wide Format Providers Source: Who Buys Wide Format?, InfoTrends 2013 To what industries do you sell digital wide format color prinOng?
- 8. 8 © InfoTrends www.infotrends.com N = 526 wide format print buyers Source: Who Buys Wide Format?, InfoTrends 2013 Approximately how many people are employed in your enOre company or organizaOon? All Sizes of Firms Buy Wide Format PrinPng Less than 5, 29.1% 5 to 9, 13.7% 10 to 19, 11.6% 20 to 99, 15.2% 100 to 499, 9.7% 500+, 20.8%
- 9. 9 © InfoTrends www.infotrends.com Who are your key client contacts? N = 310 Wide Format Providers Source: Who Buys Wide Format?, InfoTrends 2013 Who is the Wide Format Customer? Business owners, 20.3% MarkePng managers, 9.5% Brand managers, 6.7% Merchandising managers, 6.4% MarkePng execuPves, 6.1% Professional print buyers, 7.5% Media buyers, 4.3% Print management, brokers, 3.6% Facility managers, 5.2% Architects, Builders, 5.2% Department heads, mid-‐level managers, 11.4% Other, 13.8%
- 10. 10 © InfoTrends www.infotrends.com Wide Format = More Growth, More Profit 10.4% 14.5% 11.6% -‐0.5% 4.0% 7.5% 2010 vs. 2011 Revenue Growth 2011 vs 2012 Revenue Growth ExpectaPons Profit Margins Wide Format Narrow Format Source: InfoTrends
- 11. 11 © InfoTrends www.infotrends.com • Interior décor • Rigid applicaPons • Short-‐run packaging New Wide Format ApplicaPons
- 12. 12 © InfoTrends www.infotrends.com 22.9% 29.0% 30.0% 30.3% 31.9% 32.6% 38.1% 39.4% 51.3% 68.1% 63.5% 63.5% 62.6% 61.0% 63.9% 54.8% 55.5% 46.8% 9.0% 0% 20% 40% 60% 80% 100% More complex logisPcs requirements More integraPon with other markePng collateral Delivery to the point of need Linking print to digital media channels Shorter runs Just-‐in-‐Pme requirements Online ordering/web-‐to-‐print More personalizaPon/versioning Shorter turnaround Increasing Staying the same Decreasing Demand Trends Driving Analog to Digital Wide Format PrinPng What is the trend in your business in terms of the following types of demand-‐which types are increasing, decreasing, staying the same? N = 310 Respondents Source: Wide Format Prin'ng Cri'cal Element in the Communica'ons Mix, InfoTrends 2013 – North America
- 13. 13 © InfoTrends www.infotrends.com N = 300 Wide Format Graphics Buyers Source: Who Buys Wide Format?, InfoTrends 2013 How olen do they buy? Once a year 26% Twice a year 18% Three Pmes 12% Quarterly 13% 5-‐6 Pmes a year 11% 7-‐10 Pmes a year 4% 10-‐12 Pmes 4% More than 12 Pmes a year 12% Wide Format Print Order Frequency Mean = 4.6 Omes per year
- 14. 14 © InfoTrends www.infotrends.com More than 60% of Orders Need to be Turned in 48 Hours Less than 4 hours 13.1% 4 to 7 hours 9.7% 8 hours to 23.9 hours 17.8% 24 hours to 47.9 hours 20.9% 48 hours to 71.9 hours 11.9% 72 hours to 7 days 14.9% More than 7 days 11.7% What percentage of your digital wide format jobs NEED to be produced in the following Ome frames? N = 310 Respondents Source: Wide Format Prin'ng Cri'cal Element in the Communica'ons Mix, InfoTrends 2013 – North America
- 15. 15 © InfoTrends www.infotrends.com www.858graphics.com Service Providers Step Up to the Challenge
- 16. 16 © InfoTrends www.infotrends.com Wide Format Print Purchased by Customers 0% 15% 30% 45% 60% 75% 90% Other Drawings (AEC) Fine art work Interiors (wall coverings) TexPles (sol signs, garments) Maps Vehicle wraps Packaging samples Floor graphics Vehicle graphics Flags Backlit displays Billboards PresentaPons Window graphics POP displays/signs Photography Decals Signs Posters Banners N = 526 Wide Format Buyers Source: Who Buys Wide Format?, InfoTrends 2013 What types of wide format prints do you buy or specify? • Diversity of applicaPons • Different requirements • Olen with other print and markePng services
- 17. 17 © InfoTrends www.infotrends.com Wide Format is EffecPve in Accomplishing Goals Not effecPve at all 0.6% Somewhat effecPve 18.4% EffecPve/meets expectaPons for effecPveness 48.1% Very effecPve 27.0% Extremely effecPve 5.9% How effecOve are wide format graphics are in terms of accomplishing those goals? N = 526 Wide Format Buyers Mean: 3.2 Based on: Not effecOve at all=1, Extremely effecOve=5 Source: Wide Format Prin'ng Cri'cal Element in the Communica'ons Mix, InfoTrends 2013 – North America
- 18. 18 © InfoTrends www.infotrends.com How many large format graphics are in your average order? N = 310 310 Smaller Order QuanPPes, Plus… 28% 49% 23% 16% 13% 9% 12% 7% 8% 5% 5% 4% 3% 2% 2% 2% 6% 6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2011 2013 200 + prints per order 151-‐200 prints 101-‐150 prints 51-‐100 prints 31-‐50 prints 21-‐30 prints 11-‐20 prints 6-‐10 prints Less than 5 prints Mean = 36.6 prints 30.5 prints Source: Wide Format Prin'ng Cri'cal Element in the Communica'ons Mix, InfoTrends 2013 – North America
- 19. 19 © InfoTrends www.infotrends.com Versioning is Growing … Plus N = 310 Large Format Print Buyers Source: Who Buys Wide Format?, InfoTrends 2011 & 2013 – North America Of the types of wide format prints you buy or specify, what percentage includes versioning or variable graphic elements? Less than 2% 40% 3% to 5% 9% 6% to 9% 10% 10% to 14% 13% 15% to 20% 11% More than 20% 17% Mean = 10.2%
- 20. 20 © InfoTrends www.infotrends.com 1.3% 3.4% 5.5% 6.3% 8.7% 10.8% 14.1% 17.1% 32.7% 0% 10% 20% 30% 40% Can integrate signage with digital media channels Knowledgeable staff Expert design help available Wide range of products/services Convenient store locaPons Good/efficient customer service Fastest turnaround Pme Best quality of products Best prices Price is the Top Reason for SelecPng Preferred Provider What is the top reason for choosing this provider? N = 526 Wide Format Buyers Source: Wide Format Prin'ng Cri'cal Element in the Communica'ons Mix, InfoTrends 2013 – North America
- 21. 21 © InfoTrends www.infotrends.com Internet Access – A New Era 0 500 1,000 1,500 2,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 Desktop Access Mobile Access Source: Morgan Stanley WW Internet Users (M) Desktop Era Mobile Era
- 22. 22 © InfoTrends www.infotrends.com Why Integrate Print and Mobile? Interact Extend Measure Mobile is a bridge for linking the physical with the digital.
- 23. 23 © InfoTrends www.infotrends.com ConnecPng Print to Digital Channels 0% 15% 30% 45% 60% None of the above Retail store receipts Outdoor Directory Product packaging Newspapers Point-‐of-‐purchase displays Catalogs Inserts Business cards Magazines Bills or statements Direct mail Brochures What types of printed media have you included a link or connecOon to digital media over the past 12 months? N = 378 markeOng managers Source: InfoTrends – Understanding VerOcal Markets: Enterprise CommunicaOon Requirements, 2012
- 24. 24 © InfoTrends www.infotrends.com N = Wide Format Buyers Source: Who Buys Wide Format?, InfoTrends 2011 & 2103 Do you use or have you ever used QR codes or some other interacOve media element in your wide format graphics? Wide Format Buyers are Adding InteracPve Elements Yes 43% No 52% Not familiar with these technologies 5% Do you use or have you ever used technologies such as mobile barcodes, texOng codes, personalized URLs, or other interacOve element to combine wide format print with digital media channels? 2011 2013
- 25. 25 © InfoTrends www.infotrends.com Yes, 92% No, 8% N = Wide Format Buyers that have used mobile barcodes Source: Who Buys Wide Format?, InfoTrends 2011 & 2013 Would you use QR codes or other interacOve media elements again? And they love it! Will you conOnue to include QR codes or other interacOve media elements in wide format graphic products? 2011 2013 Yes, it was a successful investment, 56% Yes, but efforts have not met expectaPons , 36% No, 8%
- 26. 26 © InfoTrends www.infotrends.com QR Codes
- 27. 27 © InfoTrends www.infotrends.com Calvin Klein: Signage Meets QR Codes
- 28. 28 © InfoTrends www.infotrends.com In Paris
- 29. 29 © InfoTrends www.infotrends.com ScoPabank Campaign in Canada
- 30. 30 © InfoTrends www.infotrends.com Strategic Paths InnovaPon Driven OperaPons Driven Greater • speed • quality • efficiency • sustainability • customer service New • services • products • customers • business models ConPnuous investments in … • technology • business processes • sales & markePng that lead to … Laggards Followers Leaders
- 31. 31 © InfoTrends www.infotrends.com Importance of “Green” PrinPng Do your print purchases reflect a preference for “green” prinOng, such as prints made on recyclable materials or using environmentally safer inks? N = 526 Wide Format Buyers Which one of the following best describes that preference for “green” prinOng: Source: Wide Format Prin'ng Cri'cal Element in the Communica'ons Mix, InfoTrends 2013 – North America
- 32. 32 © InfoTrends www.infotrends.com PSPs Responding to Demand for “Green” Wide Format PrinPng Are you experiencing an increase in customer requests for “green” wide format prinOng? N = 310 Respondents Do you offer “green” wide format print services? Source: Wide Format Prin'ng Cri'cal Element in the Communica'ons Mix, InfoTrends 2013 – North America
- 33. 33 © InfoTrends www.infotrends.com Web-‐to-‐Print vs. TradiPonal Ordering $0 $30 $60 $90 $120 2011 2016 e-‐Enabled Print TradiPonal Print CAGR ’11 to ’16 11.3% -‐1.5% U.S. retail value of print ($B)
- 34. 34 © InfoTrends www.infotrends.com Wide Format Print Orders Web-‐based purchasing plaworm and/or online portal, 23% Non web-‐based or purchasing portal, 77% N = 526 Wide Format Print Buyers Source: Who Buys Wide Format?, InfoTrends 2013 What percentage of your wide format prinOng has been ordered over the Internet via a web-‐based purchasing plalorm and/or online portal in the last 12 months?
- 35. 35 © InfoTrends www.infotrends.com www.858graphics.com Providers Move to Online Ordering
- 36. 36 © InfoTrends www.infotrends.com 14.4% 30.0% 0% 10% 20% 30% Increase Decrease Growth ExpectaPons for Wide Format Graphics Purchasing By about how much do you expect wide format graphics purchasing to increase/decrease over the next 12 months? (Mean) N = 165 25 Wide Format Buyers that expect an increase/decrease in wide format graphics purchasing in the next 12 months Source: Wide Format Prin'ng Cri'cal Element in the Communica'ons Mix, InfoTrends 2013 – North America
- 37. 37 © InfoTrends www.infotrends.com Wide Format Graphics Purchasing Outlook It will increase 31.4% There will be no change 63.8% It will decrease 4.8% Q48: What is the outlook now for wide format graphics purchasing at your company over the next 12 months? N = 526 Wide Format Buyers Source: Wide Format Prin'ng Cri'cal Element in the Communica'ons Mix, InfoTrends 2013 – North America
- 38. 38 © InfoTrends www.infotrends.com Next Steps • IdenPfy compePPve placements with slower equipment and manual workflows • IdenPfy the printers who are have not transiPoned to MSPs − Does opportunity exist within their customer base for wide format? • VerOcal markets • Loyal customers who would buy wide format for them • IdenPfy the MSPs who are doing cross channel or interacPve print now but not doing wide format • IdenPfy printers/MSPs who are selling wide format to accounts with high order frequency and mulPple buyers for web to print opportuniPes − Help them expand to adjacent markets
- 39. 39 © InfoTrends www.infotrends.com Insight Statements • Facts + ObjecPves = Insight + Compelling QuesPon • Facts: General truths known by experience or observaOon Client ObjecPves: A specific need derived through research • Insight: The ability to interpret the meaning implied when facts and objecOves are combined • Compelling QuesPon: Designed to start a two way conversaOon 39
- 40. 40 © InfoTrends www.infotrends.com Lead to, Not With Pitch
- 41. 41 © InfoTrends www.infotrends.com Example Insight Statement • Fact: − On-‐line ordering of wide format is growing at a rate of 11.3% annually through 2016. • Client ObjecPves: − According to your website, customers buy from you because of your turnaround and great staff • Insight: − Customers order via the web because it saves them Ome and they can do it 24 – 7. You currently are open only 5 days a week which means that your are likely to have customers that have needs when you are not open. • Compelling QuesPon: − How will you conOnue to maintain your current level of sales If your compeOtors start offering a great on-‐line ordering experience that is available outside your tradiOonal operaOng hours?
- 42. 42 © InfoTrends www.infotrends.com Example Insight Statement • Facts: − According to an InfoTrends study 60% of all wide format orders need to be turned in 48 hours and price is the top factor in selecOng a vendor. • Client ObjecPves: − Your website states that you have fast turnaround but today you are doing that with an experienced staff who is willing to work overOme to get the job done. You’ve also menOoned that you are experiencing more and more price sensiOvity as addiOonal compeOOon enters the market. • Insight: − The need for speed is only going to increase and with more compeOtors entering the market to capture the wide format opportunity you are likely to see even more price sensiOvity from buyers. • Compelling QuesPon: − People are expensive especially the good ones who have been with you a long Ome. How can you maintain your current profit levels if the price is driven down by compeOtors who have automated their workflows and been able to eliminate people from their process?
- 43. 43 © InfoTrends www.infotrends.com Example Insight Statement • Facts: In 2011 only 20% of buyers were incorporaPng interacPve elements into their wide format prinPng. Today that number has grown to 43%. • Client ObjecPves: Your customers are non profits and you are adding a lot of value in helping them increase response rates with personalized urls and landing pages. • Insight: The reason your have loyal non profit customers is because you are helping them grow revenue and retain donors. These same non profits are also hosPng events and they use signage to promote the events and during the events. I think that by adding your cross channel experPse to wide format you could help increase the success of your customer’s events and also collect vital data through interacPve signage that could enhance their fundraising in the other channels like Direct mail • Compelling QuesPons: Would you like to explore the financial opportunity that might exist if you added wide format to your service offering?
- 44. 44 © InfoTrends www.infotrends.com Go Forth and Sell!
- 45. 45 © InfoTrends www.infotrends.com Pm_greene@infotrends.com kate.dunn@infotrends.com Thank You!