The facts are incontestable: 2020 delivered many unwanted and unexpected changes. Many in our industry felt the tension and discomfort of not having a solid white fog line that might serve as a guide through these uncharted roads. Others were able to take comfort in the guardrails they had the foresight to install, which enabled them to adapt more quickly and focus on new business opportunities.
Most of us are eager to leave the events of 2020 behind as fast as possible, but we shouldn’t miss the opportunity to recognize that much was learned about how to improve production, supply chains and sales at an accelerated pace. If one thing became abundantly clear during the pandemic, it is this: Business strategies must be dynamic and capable of navigating any bends in the road when things suddenly change.
Now is a great time to address two basic yet important questions:
At the beginning of each year, Keypoint Intelligence publishes its annual Road Map to help guide print businesses as they develop a strategy to navigate and prosper in the coming year. This document provides an overview of anticipated trends and offers insight on how to take advantage of emerging opportunities.
Over time, most industries become fragmented in terms of size and capabilities. This creates a logical path to seek opportunities for combining resources. Industry consolidation is a term that can mean different things to different people. The first and most obvious definition draws us toward the merger and acquisition (M&A) market.
Many owners and influencers within the printing industry are baby boomers. According to Pew Research Center, 28.6 million people born between 1946 and 1964 exited the labor force during Q4 2020 — 3.2 million more than the number who retired during the same quarter of 2019. With many boomers approaching retirement age and still others reevaluating their working habits due to the upheaval of 2020, consolidation will likely be prevalent among all sizes of print businesses.
The other definition for industry consolidation deals with technological advancements. Think of the merger of technology that enabled audiophiles to consolidate and eliminate devices like iPods and Walkmans. Why have several devices for storing and listening to music when you can streamline your consumption and still accomplish the same goal? The print industry is no different; the escalation of cost savings and capabilities is causing traditional offset printing and digital printing volumes to consolidate. Due to the acceleration and newfound ease of purchasing print online, we expect to see a shift from office and home print volumes to organizations that leverage both online ordering and mid- and high-level digital toner devices. Looking upstream, print production is seeing a similar transfer of volume. The shift from digital toner-based devices to production inkjet devices is beginning to occur. Production inkjet volumes persist due to lower running costs, higher productivity and technology enhancements. To remain competitive, it is important to understand the drivers behind this consolidation.
A keen understanding of print applications can help shape the future of your business. Keypoint Intelligence’s application forecast provides a view into the changes that are occurring in various segments of our industry. As has been the case for a few years now, physical and digital communications — and the ways they are connected — have taken center stage. Savvy marketers understand that a printed brochure, postcard or catalog can cut through the clutter of emails, banner ads and TV/radio commercials while also enhancing the results of online efforts. Despite this, many print buyers still don’t fully appreciate the value of digital print. Due to ongoing advancements in digital print technology and the ongoing effects of COVID-19, shorter runs are even more top of mind than they were before.
We are now witnessing a clear shift toward the applications that can be enhanced with shorter runs, personalization and customization. In addition to the areas highlighted in the figure below, segments like packaging and consumer prints are also experiencing rapid growth. It will remain critical for suppliers to the industry and users of equipment to pivot based on ongoing market requirements. Overall, digital production printing offers solid opportunities for growth.
The lingering effects of COVID-19 will continue to cause an uptick in the volumes of digital-only communications like email and text messages. In parallel, ongoing concerns about secure, safe and authentic communications will carry into 2021. Keypoint Intelligence recently took a critical look at consumers and their channel preferences in its annual Transactional Communications research, and two very interesting phenomena were uncovered:
As businesses seek to establish and maintain meaningful relationships with prospective and current customers, the use of personalized and relevant content can create an important connection. Print distributors can support printers in rising above the fog, eliminating fatigue and strengthening the bond with target audiences.
The issue of print production innovation remains top of mind. The disruption to business during 2020 was a clear indication — a sound system that keeps jobs flowing through the production process in a virtual environment can deliver a huge payoff. In addition to the pandemic, it is fair to assume that there will be other reasons where a more consistent work-from-home model may be necessary, yet the topic casts a wider lens. The benefits that come from an automated and connected environment can provide payoffs every day, regardless of employees’ physical locations.
While most print providers pay attention to revenue, sales growth and profitability, there is a lesser focus on bottom-line costs. Print distributors that focus on turning print projects into well-executed programs can control costs for their customers as well as their own operations, and are better positioned for growth. It’s difficult to connect the dots going forward, but firms can be successful by connecting the dots of the past. 2021 should be a year to look back at where various dots connect. In areas where they don’t connect, there is an opportunity to homogenize the process. Standardizing the way work gets done is not a foreign concept for commercial printers. The events of 2020 have proven that it is now time to take automation to the next level.
During a recent survey, Keypoint Intelligence asked print service providers about the share of their total on-site print volume that was produced in a 100% automated workflow and their expectations for the future. As shown in the figure below, a clear growth in the rate of automation and intelligence is expected over the next two years.
The snowball effect of a manual process can transform a minor inefficiency into an unimaginable catastrophe. Meanwhile, a defined and documented process creates an additional value in your overall offering that cannot be touched. Intelligence in the print production space is no longer a fantasy. There is no question that the digital transformation will soar during 2021.
Convenience and ease of use are the primary drivers of online purchasing. During the lockdown phase of the pandemic, the need for online portals and contactless e-commerce practices accelerated. Now, even as the economy has started to reopen, consumers and businesses will continue to gravitate toward the newfound convenience of e-commerce. Online portals and web-to-print solutions were first popularized in the late 1990s, and printing businesses are quite familiar with these practices by now. A well-designed print portal can ensure that service-level agreements (SLAs) are met and fit seamlessly between the customer and production team. A surge of print volume produced through print e-commerce sites will continue.
The pandemic heightened concerns about conducting business in-person, but many will likely continue the practice due to the convenience and time savings. According to research by Keypoint Intelligence, 21% of small businesses (print buyers) were no longer comfortable walking into a printing company to place an order. Another 43% were only somewhat comfortable. The study also found that 49% of print buyers would definitely increase the use of online ordering to purchase printed materials.
A shift in job titles occurred when COVID-19 forced much of the industry into lockdown mode. Outside salespeople suddenly became inside salespeople. This created a multitude of challenges for even the most experienced reps. With more and more buyers and sellers of print embracing the use of online meeting platforms, an important decision must be made in 2021. Ask yourself: Will your pre-COVID-19 sales structure stand up to the requirements of today’s buyers? A critical look at how your customers respond to your sales and marketing activities may point to a need to reevaluate your sales reps’ skill sets. Who on your sales team is great at getting prospects in the pipeline? Which reps are masters at moving an opportunity to close? Once you’ve pondered these questions, redesign the roles of your sales professionals to optimize customer engagement.
A study conducted in 2020 indicates that direct sales continues to be the most common practice when it comes to attracting new customers. Sales enablement tools and resources are a relatively new concept for most sales operations, but any effective conversation about sales efforts must also include consideration of sales enablement. To close more business, you must support your salespeople with the proper tools. To effectively sell your product or service to customers, it’s important to implement resources like white papers, case studies or sales training. With that in mind, a greater emphasis is being placed on lead generation campaigns.
While many traditional channels are also seen in the data, the effectiveness of marketing efforts relies heavily on using the right method for the right audience. A tailored approach to support the specific roles on your sales team may mean developing one lead generation program to capture the interest of your targeted audience and implementing a different program to move a prospect through the sales pipeline. Sales traction in 2021 will depend on the processes behind it. There has never been a better time to examine sales best practices and model your sales efforts around specific, well-defined steps that can help earn your customers’ business.
According to the FBI, cybercrime has risen 300% since the onset of COVID-19. Cybersecurity became a topic of huge importance with the growth of data utilization and consumers’ increasing demands for privacy. As a result, privacy and security clauses are showing up in more printers’ request for proposals (RFPs). On the consumer side, a recent poll by IAAP indicates that 93% of citizens would switch to privacy-conscious organizations if given the opportunity. Consumers take comfort in the knowledge that the organizations they’re working with have put security top of mind. Data privacy and security is a differentiator that can generate higher profits and improve customer retention.
Within any organization, people represent one of the most volatile compromises to security. Training your people on how to recognize a threat, bot or email that might put customer data at risk cannot be overlooked. Your employees engage in online activities every day, and cybercriminals are becoming increasingly sophisticated in their efforts to access personal data. Turbulent times require actions to protect customers’ privacy.
Developing a strategy for security involves identifying gaps in your current processes and procedures. Examine both on-site and work from home scenarios, then consider obtaining certifications and accreditations that will help put your customers’ minds at ease. Data security is more than a strategy; it’s a requirement when it comes to protecting sensitive, proprietary and personal data.
Informal scorecards have been a topic of conversation for years. Externally, the customer scorecard of 2021 must reflect how your customers see you, what you must excel at from their point of view and what innovations will deliver continued improvements to their business practices. Gathering and processing the voice of the customer is a practice that can yield great insight. The power of the information can mean the difference between loyal, dedicated customers and those that are transactional.
Internally, the scorecard is customer-focused yet still encompasses your business processes. Relying heavily on data analytics, it measures the ability to innovate and improve products, processes and services. In short, it determines your company’s value to the customer.
COVID-19 brought many changes to business processes during 2020 and also introduced new insights to the term “partnership.” Beyond improved efficiencies and recovering revenues, strategic plans in 2021 will put a spotlight on the critical requirement to better understand your customers’ and prospects’ needs.
The pressure to deliver a broader range of products and services is not going away. Digital print technologies that enable CMYK+ print enhancements are becoming more prevalent in digital production devices at all levels. In recent years, investments in CMYK+ technology have been used to create competitive differentiation and expand offerings. While the idea of print enhancements and color embellishments is certainly exciting, adoption and print volumes in this area have been slow to grow.
Print — specifically offset print — has historically initiated the ability to offer CMYK+. This begs the question: Did all print enhancements go away, or are they just misunderstood by today’s digital print buyers? Those that educate and inform their customers and prospects will be better positioned to capture the opportunities as digital print continues to encroach on offset printed offerings.
Print providers must reflect on the lessons that we learned during 2020 and make decisions that better align with clients’ changing needs. A successful strategy for the future must include fresh, bold ideas. Now is the time to dig in, define the steps to execute your strategy and then follow through so your vision does not fall victim to poor execution.
As we navigate through 2021, leaders in the print industry will continue to focus on communication practices and business processes that bring additional value to the customer experience. The pacesetters of tomorrow will also consider additional investments in technology, software platforms, well-designed automation and education so they can create a friction-free path toward better serving their customers’ needs.
Karen Kimerer is the director of production services for Keypoint Intelligence – InfoTrends. She has experienced the many challenges of expanding current market opportunities and securing new business and has developed a systematic approach to these opportunities, addressing the unique requirements of becoming a leader in our changing industry.