Complaining is not my thing – and surrendering to one’s fate without resistance is even less so. What is my thing is the printing industry and the question of how it will continue to develop. I’d like to explain to you how we at zipcon see the future of the printing industry. But I must warn you in advance: this article contains not only bitter realizations, but also numerous facts and forecasts that genuinely hurt. Please only read on if you see a crisis as an opportunity.
Right off the bat, there is one thing: don’t tell your customers how bad everything is. Acting out inner conflicts and repressed emotions is supposed to lead to a reduction of conflicts, but aggression towards the actual potential does not bring catharsis but carries the risk of a disastrous downward spiral. It is much better to navigate and work with the customer to meet their needs.
I’m tired of complaining about Corona. I’m interested in what’s next for our printing industry. Let’s just take note of the facts and evaluate them. Based on that, we can come up with recommendations for action. The German Economic Institute puts the inflation rate in August 2021 at 3.49%, and in October the rate was already 4.5%. This is a tragic deterioration in the inflation rate, and not just in Germany, as the development applies to the whole of Europe – with a spread from Malta at 0.4% to Poland at 5%. As a result, companies from countries with high inflation are increasing their print exports. So, we have to be prepared for low-price offers.
Fundamentally, the economy is split. Industrial production output is shrinking as a result of supply bottlenecks for intermediate products. At the same time, service providers have recently recovered quite strongly. Society has changed, and we need to understand what has actually happened. For a good fifth of society, the combination of offline and online has become commonplace. The study by SINUS Markt- und Sozialforschung foresees both friction and a new formation of the mainstream of society in Germany in 2021. Lifestyles and values are drifting apart – as could be observed over the last few months. While one part is reorienting or rather modernizing itself due to the new circumstances, another sees itself threatened by a “social devaluation” and is increasingly separating itself in all directions. At the same time, other segments of society are moving into the so-called centre of society – and in the upper middle class/upper class, the importance of sustainability and climate protection is even creating a new segment of society.
Despite all the changes, the majority of society is moving in the direction of modernization. This is because digitization has turbo-charged even conservative societies. Sales on online marketplaces are on the rise, and according to a recent survey by Bitkom, the number of retailers on social media has doubled. According to the survey, more than two-thirds of retailers (68 percent) have their own social media profiles in order to gain the attention of potential customers. One third also place ads on these platforms. Overall, the industry association found, almost three-quarters of retailers are active in some form on Facebook, Instagram and the like. That is more than twice as many as two years ago.
The corona virus has changed society, and above all purchasing behavior. Although sales of books have increased slightly, they cannot compensate for the drop in sales in the travel book sector. Individual areas in print are “booming”. Folding boxes and labels, B2C offerings in the lifestyle and photo sectors are growing by 15-20%. Cewe, for example, generated a healthy increase in sales in 2020 despite the pandemic.
One has to face the fact: there will be a market concentration, with fewer but larger and more profitable print producers. That was the bad news for innovation resisters who are resistant to consultation.
For companies that have an appetite and passion for print products, there is in fact at the same time great potential. B2B and B2C product suppliers need to do more advertising to stabilize product sales. New customers understand the principle of “mass customization” and demand this from their suppliers. The “value” mailing from 1 print run onwards is experiencing a renaissance. Companies that continue to rely on converting PDFs to top print quality, delivering them in high volumes and on pallets to one address (ok, most of them can do a bit more) will have to deal with new market entrants and lateral entrants. These new companies are not thinking about starting a print shop – for them, printing is simply a manufacturing step in the entire supply chain.
“What can one do immediately as a printer?”, I am often asked. The answer is always the same. Follow the trend, solve your customers’ problems and deliver value. Social media is not the enemy. The combination of social media and print acts as a booster for advertising. Do you have long-standing customers, and your sales team relies on loyalty? Knock it off, because even long-established associations have their products produced abroad and put up with the shitstorm. Forget about loyalty! Instead, see to it that the complex processes in your company become lean and simple. Time and again, well-made websites feature terms and conditions that even your own sales team cannot understand. Customers are multi-optional and the access to the service provider has to be as well. People who order online in the morning still want to be able to make a phone call in the afternoon and send an e-mail about the same transaction later.
Paper prices will rise, energy costs will rise, wages will rise. In the medium term, no one can be stuck with these kinds of costs, especially not when Corona has attacked not only their health but also their reserves. Purchase prices for print will rise. The price increase for print products in Germany for 2022 is forecast to be between 6.8% and 8.2%. Now is the time to raise prices. It’s time for sellers – not giveaways – to take action.
What’s the next immediate step? The clock is ticking, how do we make the best use of time? Those who fail to rebuild their company’s DNA can still dress up and sell. But if you’re truly passionate about printed products, you need to reflect. It starts with examining four essential characteristics: Is the company lean, agile, virtual and collaborative? These aren’t buzzwords; this is a concrete recommendation for action. Learn from the start-ups, become fast, lean and agile again. Because so are your customers. If you don’t think virtually today, you need to quickly learn to do so or find a collaborative partner who can. There are new technologies that enable cost-effective production of “1 print run”. As a commercial printer, you don’t have to be able to print textiles in LFP tomorrow, but you do have to be able to offer it to your customers. Platforms connect suppliers, intermediaries and end customers. Digital platforms enable efficient collaboration and are at the same time a business model for a modernized printing industry.
Print is and will remain irreplaceable, and not just for packaging. The onliners were the pioneers, and we should praise them for that, because their successors can build on their achievements. But as always in disruption, it’s not the biggest that win, but the fastest. Print shops have to move, otherwise others will come along and occupy the print production step throughout the value chain. “Hurry up!” applies to the entire print industry!
Note: This text was created from a presentation given by Bernd Zipper at the end of October 2021 as part of the Printed-in-Switzerland event “power pur” organized by the Swiss association, Viscom.
