MARKET: THE GLOBAL IMPACT OF COVID-19 ON THE PRINTING INDUSTRY

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Cloudprinter.com has conducted a study on the global impact of Covid-19 on the printing industry. According to the report, photo personalization, capabilities via Amazon and shipment tracking are shaping the digital printing industry. It’s been more than a year since COVID-19 went global. The unprecedented impact has created a crisis and thrown the world into disarray. Many industries are suffering, while others are doing remarkably well. This study focuses on the impact of the coronavirus from 2020 to early 2021 on both the printing and e-commerce industries.

Source: © Photo by Cloudprinter / www.cloudprinter.com

Stationary retail was forced to change its business models and adapt to new conditions. At the same time, the majority of online retailers began to implement some improvements to increase their efficiency. Amazon, for example, hired 427,300 additional employees to meet growing demand and, according to analysts surveyed by FactSet, expected quarterly sales are to exceed $100 billion for the first time in the fourth quarter.

What is clear is that the e-commerce industry has changed virtually overnight:

  • The number of purchases during the 3-month lockdown equals the number of purchases made in the last 10 years.
  • During quarantine, 75% of U.S. consumers tried different stores, websites, or brands. 80% of shoppers plan to continue shopping online.
  • Online delivery volume increased by the same amount in 8 weeks as it did in the entire last decade.

Cloudprinter.com is a platform for digital printing and the delivery of print automation solutions for e-commerce and has a natural interest in the impact of the lockdown on the printing industry.

Source: © Photo by Cloudprinter / www.cloudprinter.com

A mixed situation developed in the digital printing industry: While the personal photo sector benefited, other segments such as hospitality (hotel, restaurant, catering) and the travel industry required significantly less print.

It is impossible to say that the printing sector grew smoothly throughout the quarantine, as this growth was unevenly distributed. Some companies printed more than usual, while others ceased to order print at all.

In light of the quarantine, many companies switched to home offices, which further accelerated the trend toward going paperless from a business perspective (there were significantly fewer orders for envelopes, business cards, letterheads, binders, etc.). Since people had to stay home, they looked for distractions and spent money online.

While brick-and-mortar retailers had to stay away from (walk-in) customers, online retailers called the lockdown a big Christmas. In terms of photo book printing services or canvas / forex printing, the Christmas period typically gives printers 80% of their sales. In 2020, this period extended from spring to October with a slight drop in summer and a massive increase from November to December.

Another important factor is closed borders and national closures. Due to this, global distribution channels were disrupted while demand remained the same and even grew. The Chinese closure, for example, had a major impact on the publishing business, as the supply chain was disrupted and booksellers ran out of supplies.

When companies are unable to print and deliver cost-effectively overseas, or their parent printers are closed due to coronavirus outbreaks, local automated print-on-demand, driven by intelligent algorithms, becomes an attractive alternative. As a result, domestic markets, manufacturers and suppliers are gaining an advantage over foreign competitors as they supply the bulk of the nation’s printing needs. Cloudprinter.com reports that the pre-holiday season had a similar impact on their business. Customers were looking for new fulfillment and deployment options due to coronavirus spikes.

Basics of market analysis

Of the total 1.3 million orders processed through the cloudprinter.com platform between March 2020 and January 2021, 65,000 randomly selected print jobs were used for analysis for the COVID-19 study.

No one knows how or when the pandemic will end. The duration is unclear and news of more waves of the pandemic is spreading. To talk about impact of the crisis or current and potential losses, robust numbers are valuable gold.

Source: © Photo by Cloudprinter / www.cloudprinter.com

As can be seen, the coronavirus situation has not become an obstacle for print providers in Europe. Although countries such as Germany, Italy and France became the epicenter of the pandemic in the EU in the spring, they ranked 2nd, 3rd and 6th with over 32% of all orders.

During the analyzed period, the U.S., India, the U.K., and Malaysia were under strict lockdowns with slight relaxations, which meant that e-commerce companies were looking for ways to fulfill their orders.

Compared to fall 2019, the ranking doesn’t look much different: The Netherlands and Belgium take the leading positions, with the US, Germany and France following.

Source: © Photo by Cloudprinter / www.cloudprinter.com

Print products with high demand

If we disregard countries and focus on products, we see significant growth in the photo personalization category. Regardless, corporate orders are trending towards steady growth as of June.

Source: © Photo by Cloudprinter / www.cloudprinter.com

Personal products such as photos (46.81%) on canvas, forex or similar, photo books (37.57%) and posters (2.07%) together accounted for 86.45% of all orders during the pandemic.

Source: © Photo by Cloudprinter / www.cloudprinter.com

This tendency is explained by the circumstances of the lockdown:

  • People had more time to organize their past travels and ordered more photo books.
  • Since people were at home more, they started to think about interior (re)decorating more often and made efforts to make their homes cozier.
  • During the lockdown, except for online shopping, there were not as many ways to spend the money.

It is obvious that business printing was lower with only 13.55% of orders. But even if we compare the number of orders with the similar period of 2019 (e.g. September), we can see the trend of companies streamlining and automating print ordering.

Source: © Photo by Cloudprinter / www.cloudprinter.com

Demand for business cards or greeting cards increased from the beginning of the summer once quarantine restrictions were lifted. Even more conservative businesses looked towards automated and contactless solutions to meet their needs, according to Cloudprinter.com.

Demand for printed products such as custom packaging, promotional items and labels has steadily increased during the Covid 19 pandemic. Cloudprinter.com says it is responding by adding these products to its existing catalog.

Order quantities and values

As a rule, customers rarely order more than one product in a single order. The only exception was in October 2020, when the average number of items per order reached 5.

This increase was most likely caused by two factors. First, the upcoming activity during the holiday season: both corporate buyers and consumers ordered gifts and souvenirs (e.g., there was an increase in orders for calendars in addition to the usual corporate printed products). Second, the fall became a time when the corporate sector began to recover from the effects of the pandemic.

Orders fell into two categories (corporate and commercial). Commercial orders (excluding wall art – canvases, photo tiles) in most cases consist of only one item. For wall art, these numbers increase up to 5 items.

For business orders, the approach is different, as corporate orders usually require a large number of copies. The average number is 861 pieces with, for example, an average of 2,050 copies in the order of flyers and 645-650 copies in the order of business cards and folders.

Source: © Photo by Cloudprinter / www.cloudprinter.com

When talking about the development of the order value, the tendency seems to be quite typical. As the platform grows and the print network expands, the average order value decreases because it is inversely proportional to the volume: the more we print, the lower the price of an order.

Several factors explain this: A higher number of print partners implies that orders need to be printed even more locally. This leads to better and more competitive prices from print shops. In addition, the shipping distance is shortened, which reduces shipping costs.

During this period, average monthly order values generally fluctuated only slightly (€13.10 to €13.80) and averaged €13.82 (excluding VAT) per order during the period analyzed.

Looking at the entire period, the trend toward a decline in average order value is quite clear: starting at €16.96 in March 2020 and ending at €8.15 in January 2021.

Source: © Photo by Cloudprinter / www.cloudprinter.com

Job tracking is crucial

Delivery and shipping are critical factors today. Consumers get everything delivered and pay much more attention to shipping methods: What are the prices and are packages trackable or not.

For this reason, a look at the delivery options selected by users to receive their orders is exciting.

In an era of “deliver everything,” the majority of consumers choose trackable delivery because they want real-time updates and the ability to check the status of their package at any time.

During the lockdown, tracking was selected as an option for 90% of deliveries. The trend for tracking during the analyzed period is steadily increasing, while the demand for non-tracking options remains stable and basically shows no growth. This means that the more consumers order, the greater the desire for control to keep track of deliveries.

Use of machines

Another aspect of the analysis is equipment. Within Cloudprinter.com’s global print network of around 170 print partners worldwide, HP leads the way in terms of presses. Two-thirds of orders are printed on HP machines (Indigo, DesignJet, Latex, PageWide models). Canon (varioPRINT, imagePRESS, Colorado, Arizona) follows with about 25% of the print orders. The machines of other brands (Xerox, Generic, Kodak, Fujifilm, Ricoh, Mimaki) were used in 6.5% of the orders.

Source: © Photo by Cloudprinter / www.cloudprinter.com

Conclusion

Of course, statements can be interpreted in different ways and it remains unclear how the post-Corona period will evolve, but the analysis can be summarized and permits four conclusions:

  • Various global e-commerce statistics show: The coronavirus crisis is likely to accelerate existing industry trends. This means that the area of online purchases and deliveries is growing continuously – regardless of whether it is business stationery or end customers.
  • From a supplier’s perspective, automation of order processing is in demand. Demand for highly automated and fully integrated workflow systems is growing as consumers expect the “Amazonization” of the entire e-commerce industry. This trend is forcing all suppliers to accelerate.
  • Automation is becoming increasingly important at both the equipment and workflow levels. Highly skilled professionals cannot be replaced quickly. Easy-to-use systems that require less knowledge are important for production.
  • The return to the typical business model may be a long way off and no one can predict the future. Companies, instead of waiting and hoping, should address the transformation of their own business to meet customer and business needs.
Bernd Zipper My Take: Cloudprinter.com has conducted a noteworthy study and the numbers confirm a gut feeling. Which is good, because you have to rely on something in these times. However, the fact that the online printers are in a good position because they set the course in good time doesn’t mean that conventional print shops can’t get a piece of the action. Even if conventional printers do not operate a store on Amazon tomorrow, they will still have to comply with the usual practices there, at the very least when it comes to shipping and logistics. Simply because it is in demand and the buyer may have to organize the receipt of goods from his home office. The fact that these new practices are called “Amazonization” may not be to the liking of some, but there will be no getting around these new standards, even if Corona is behind us.
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MARKET: THE GLOBAL IMPACT OF COVID-19 ON THE PRINTING INDUSTRY
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MARKET: THE GLOBAL IMPACT OF COVID-19 ON THE PRINTING INDUSTRY
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Cloudprinter.com has conducted a study on the global impact of Covid-19 on the printing industry. According to the report, photo personalization, capabilities via Amazon and shipment tracking are shaping the digital printing industry. It's been more than a year since COVID-19 went global. The unprecedented impact has created a crisis and thrown the world into disarray. Many industries are suffering, while others are doing remarkably well. This study focuses on the impact of the coronavirus from 2020 to early 2021 on both the printing and e-commerce industries.
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Beyond-Prind.net

Founder and CEO of zipcon consulting GmbH, one of the leading consulting companies for the print and media industry in Central Europe. The technology and strategy consultant and his team actively support practical implementation in a wide variety of customer projects. His work involves developing visions, concepts and strategies for the players active in the print production process across a wide range of industries. His areas of expertise include online print, mass customization, strategy and technological assessment for print, and the development of new strategies in the print and media environment. Bernd Zipper is the creator and chairman of Initiative Online Print e.V. and, in addition to his consulting activities, is an author, lecturer and sought-after speaker, orator and moderator. His visionary lectures are regarded worldwide as trend-setting management recommendations for the print and media industry. (Profiles also in Xing, LinkedIn).

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