American Printer's mission is to be the most reliable and authoritative source of information on integrating tomorrow's technology with today's management.
Dec 1, 2003 12:00 AM
Clients often ask me, “What critical issues will affect commercial printers during the next five years?” It's a sensible, pertinent question. It's also been answered too many times by people who, having failed to understand the lessons of history, are doomed to repeat it.
It is instructive to read the list of exhibitors, products and services featured at the PRINT 93 trade show. Many of those alleged “breakthrough” products are now distant memories. In fact, some of the exhibiting companies are distant memories. And much of the whiz-bang technology that has survived represents solutions still searching for problems.
In recent years, national trade associations have published treatises about the future of the graphic-arts industry. These articles have almost always dealt with technology. Topics have addressed the glorious future of variable-data output, use of toner-based reproduction, pre-media technology and changes in workflow. For the most part, these contributions represent manufacturers of equipment and consumables.
The operative assumptions seem to be that (a) you, the printer, had better invest in this technology or your competitors will beat you to the punch, and (b) technology drives the market.
The latter assumption is horribly misguided. Despite the trauma affecting print demand since 2000, there seems to be little appreciation of the fact that the needs of print-buying organizations drive adoption of technology, not vice versa.
The preponderance of articles, books and anthologies dealing with print industry “futures” are based on equipment. Why doesn't anyone speak to representative members of the buying community? What about the use of print in their media mix in the short and intermediate-term future? Why is there so little discussion about the effect of do-not-call lists, e-mail clutter and privacy legislation upon demand for print?
Here are my opinions on the core issues facing graphic-arts companies in the next five years.
The state of the economy will not change the core of the U.S. economic system. The printing industry cannot return to “normal” (whatever that is) unless its customers' respective businesses return to “normal” — and that is not going to happen.
The same buyer behavior and societal conditions that gave us supermarkets and Wal-Mart will continue to influence the print-buying community: ease of procurement and a realization that dealing with multiple resources is a time-consuming exercise carrying above-average risk of failure. This is the phenomenon driving printers into distribution services, mailhouses into printing and service bureaus into database management.
As a result, new-account development will be increasingly arduous and time-consuming as companies provide womb-to-tomb services, effectively taking many buying organizations out of play.
Business will continue to be characterized by increasing peaks and valleys of production. Last year, the average print company we surveyed had a difference of 2.3 to l between its best and worst sales months. Target marketing by print customers is likely to cause a 3-to-l ratio by 2009. Regardless of technology, cash-flow management will rival sales and costs as an issue that will determine the life or death, health or sickness, and relative prosperity of graphic-arts firms.Target the customer
Salespeople will need to be able to create demand, to understand customers' respective businesses well enough to suggest steps to make printed matter more productive, not simply use price as a device to capture existing demand.
No equipment, technology, organization or staffing can substitute for a differentiated mission/strategy. Good product at a competitive price does not win in a commoditized business; it is the least that people expect. A successful company needs to provide unique perceived benefits to a targeted marketplace. This will only become more true during the next decade.
Certainly equipment is important to a graphic-arts firm, but the marketplace will dictate its usage and pricing. Our industry is characterized — to some degree of truth — as one in which businesses look for ways to spend a million dollars on equipment so they can lower price. In reality, it will be customers who determine the shape of the graphic-arts industry during the next decade, like it or not.