Five themes dominated the outlook sessions, keynote presentations, and panel discussions during the Wide-Format Hardware and Consumables Insight Day (October 26) and the Wide-Format Workflow and Finishing Day (October 30).
Download a guide to each topic covered during the 14 days of the PRINTING United Digital Experience: » Virtual Publication Bin (printingunited.com)
Before COVID, graphics business owners expected 2020 to be a banner year.
In this keynote presentation, Tim Greene, research director of IDC, noted in Q4 2019, 86% of the companies surveyed said large-format graphics work was still growing and 83% said profit margins had grown over the past two years.
The Q4 2019 research also showed that 76% of large-format shops were considering new market opportunities and 83% had planned to invest in different types of printing and finishing equipment.
Business owners in the panel discussions said January and February of 2020 were fantastic months and the year was shaping up to be one of their best years ever.
The COVID-19 shutdowns in March and April 2020 disrupted major segments of the large-format business. Trade shows and events were cancelled and steep declines in travel and tourism devastated the demand for graphics in airports, theme parks, hotels, restaurants, and other venues.
According to NAPCO Research Principal Analyst Lisa Cross, 87.5% of the participants in the study of COVID-19 Business Indicators said their sales declined in March and April. The average sales decline was 52.3%.
In a panel discussion about the future of signs and graphics, two executives of wide-format graphics firms said the COVID-19 shutdown “was a jolt to the system” and “just seemed to happen overnight.” Business owners said they had to make changes quickly, save cash, and prepare to capitalize on the rebound.
The versatility of wide-format printing and finishing equipment enabled companies to pivot to fill immediate and evolving needs. Companies that served essential businesses such as healthcare facilities, grocery stores, and big-box retailers acted quickly to fill immediate needs for social-distancing graphics, safety posters, and window and curbside graphics to announce new pick-up areas and services.
Some trade-show exhibit companies designed and built pop-up shelters for COVID testing centers or temporary medical facilities.
One graphics display company owner said their company not only pivoted to personal protective equipment, but also to corrugated packaging: “That business increased exponentially”
Another wide-format display company executive said the laser fabric cutter the company purchased to make dye-sublimation fabric displays was put to work cutting fabric for face masks and other garments: “It helped us get through the periods when we didn’t have any other work.” The automated cutter freed the sewing employees from having to stop, measure, and manually cut fabric.
During the spring and summer of 2020, wide-format graphics producers started selling new types of signage. For example, when spring graduation ceremonies were canceled, savvy graphics producers created a demand for personalized yard signs and hanging banners to honor individual graduates.
The reopening of restaurants, healthcare waiting rooms, stadiums, and offices led to an expanded range of orders for all types of safety and social-distance signage, including plastic dividers in bars and restaurants, seat barriers, and photo cut-outs to represent fans in the stands.
Now, some acrylic booth dividers are being printed to enhance restaurant decor and social-distancing floor graphics are being updated with brand advertising or holidays messages.
By July and August, wide-format graphics producers were showing some first signs of recovery. Compared to the March/April time period, 38.6% of respondents to NAPCO’s COVID Business Indicators research said their sales activity rose in the July/August 2020 period, 35.5% had more work-on-hand, and 41.7% were doing more quotes.
Not all wide-format print businesses were equally impacted.
According to sign and graphics research conducted by Keypoint Intelligence, 57% of survey respondents said revenues declined by 21% or more during the first four months of 2020. Another 25% of responses reported sales declines of 20% or less. A fortunate 3.4% saw an increase in revenues of more than 10%.
In a panel discussion about capital investments in the shadow of COVID-19, the owner of a trade printing service, said April was a good month for them because they specialized in printing short runs of yard signs. Throughout the spring, they printed thousands of yard signs for dozens of customers who wanted to express appreciation for health care workers and recognize middle school and high-school graduates.
Several panel-discussion participants noted that larger graphics companies with diverse capabilities were better positioned to pivot and survive the year of COVID-19. They predicted smaller mom-and-pop shops with limited equipment and marketing resources would continue to struggle.
One business owner admitted that pivoting to new products isn’t always easy. He likened it to asking an offensive lineman on a football team to suddenly play wide receiver.
Some owners continued to make capital investments, but admit the margin for errors is shrinking and timing is very important. Experienced print business owners know that marketing and advertising budgets are among the first to be cut during economic slowdowns. But they are also the first budgets to be ramped up during a rebound.
One participant commented that in the 2008-09 recession, “We were too slow to make painful cuts, and slow to add capacity to handle the rebound.” He hopes to avoid that situation this time..
“As an entrepreneur, I am always quietly optimistic,” said one owner. Even in the midst of economic downturns, “There is an opportunity in there somewhere.”
Owners are looking ahead to 2021. The large-format business owners who participated in the PRINTING United panel discussions are cautiously optimistic. But they realize that some markets and consumer behavior have changed forever.
While in-person trade-shows and events may re-start in 2021, the live shows are likely to attract fewer people. And, the role of retail stores may have been permanently changed by the surge in online shopping.
Andrew Paparozzi, chief economist, PRINTING United Alliance,. predicted that the real post-COVID recovery will start happening only when we have learned to live with COVID, and people feel comfortable traveling again.
He said participants in the “COVID-19 Print Business Indicators” studies were anticipating growth in online sales of print products and seeing new opportunities in anti-microbial graphics, complex display fabrication, interior decor, and specialty graphics.
IDC analyst Tim Greene agreed that new types of applications will fuel the recovery. For example, although branded hand-sanitizer stations don’t involve large amounts of printed graphics, businesses can make nice margins by fabricating the stands and selling them for use in offices, manufacturing facilities, schools, and other locations.
Printed graphics with QR or NFC codes could support redesigned “touchless” retail environments and printed backdrops might be useful for corporate sales and administrative personnel who continue to video conference from home. The many restaurants and other businesses now offer home-delivery services may want vehicle wraps or graphics.
Analyst Lisa Cross noted that one reason large-format graphics producers are resilient is because almost any surface today is a blank canvas for digital printing. Surfaces can be printed with either decorations to enhance the ambience or brand messaging
A graphic printing business owner affirmed that observation:“Our wide-format segment will continue to grow. People are putting large-format printing on more and more things in creative ways.”
Some owners believe that new customers they picked up during COVID-19 disruptions will continue to do business with them during the recovery.
Greene believes some companies will stabilize their businesses by continuing to expand the ancillary services they were planning in Q4 2019. Some of the most frequently mentioned services that large-format graphics providers planned to add include:
- Design services (57.2%)
- Installation (43.3%)
- 3D printing services (40.2%)
- Sign permitting (33.5%)
- Pre-site consultations (27.3%)
- Packaging or package prototyping (25.8%)
- Digital signage/digital display assembly (25.3%)
- Label printing (24.7%)
- Digital signage/digital display content (24.7%)
- Direct-to-garment T-shirt printing (24.2%)
- Narrow format printing (20.1%)
- Interior decor applications (20.1%)
“COVID-19 has accelerated the need for businesses to evolve,” said Greene. Wide-format graphics companies can evolve in many directions and produce many types of products to reposition their shops for recovery and growth.
He advised print-business owners to develop detailed and data-oriented plan and to continue to invest in production technologies that enable their shops to produce a wider variety of applications,
All of the wide-format graphics presentations and business-leader panel discussions on Day 1 and Day 5 of the PRINTING United Digital Experience can be viewed online at no charge until January 31, 2021. Visit: https://www.printingunited.com/ to register and access the video presentations.