While the price spiral for energy and raw materials continues to climb, prices in online printing passed their highest point for the time being in the third quarter of the year and reached a plateau. This is the result of the latest ZOPI, the zipcon online print Price Index, which is compiled quarterly by zipcon consulting. However, just because the majority of online print shops included in the index have kept their prices more or less stable on average or even lowered them slightly over the summer months, the all-clear is by no means given.
The situation remains tense: At the end of September, the Federal Statistical Office Destatis (Statistische Bundesamt Destatis) issued a year-on-year increase in energy prices of +43.9%, while inflation climbed to a new high of 10% in the same period. The Institute of the German Economy (Institut der deutschen Wirtschaft – IW) believes that Germany is heading for a recession and, in view of these developments, companies in the German printing industry are also pessimistic about the coming months, as the latest BVDM economic telegram shows.
This is hardly surprising, since printing plants are not only energy-intensive by nature – their main material, paper, also requires a lot of energy and raw materials that are becoming increasingly difficult to obtain – with the result that paper manufacturers have been announcing price increases at relatively short intervals for almost two years now, converting some of their plants from graphic papers to packaging papers, changing their energy supply – or even selling entire paper mills, as Sappi recently did to the investment company Aurelius Group.
Paper is still considered to be in short supply, and major newspaper publishers such as FAZ are stocking up on paper as a precaution. The Schwarz Group, which owns Lidl and Kaufland, among others, is putting its money where its mouth is and buying the Maxau paper mill from the paper manufacturer Stora Enso. The announcement of this quite unusual takeover caused a stir in September, because unlike Rewe and Obi, which intend to discontinue their printed advertising brochures next year (with restrictions in the meantime), the Schwarz Group’s move can certainly be seen as a commitment to the printed product. In doing so, the Group is responding to the wishes of its consumers, who continue to regard advertising brochures as the most important advertising medium, a fact confirmed by several studies carried out in 2020.
Are online print shops more resilient?
For companies in the printing industry, the ongoing consolidation in the paper market and the further increase in paper and energy prices continue to pose major challenges. What is striking is that print shops that have already digitized their processes and sales channels seem to be more resistant, more resilient, to the ups and downs described above. Why is that? Because, thanks to their business model, they can react more flexibly and adjust their prices more easily and quickly to market developments.
As previous ZOPI surveys have already shown, average prices have been rising since the summer of 2021, which means that online print shops have and were able to pass on the increased costs of energy and paper (at least proportionately) to their customers.
Prices in online printing reach plateau
In the third quarter of this year, however, average prices in online print changed direction: the average prices for flyers and also for the shopping cart recorded in the zipcon online print price index fell slightly in July and August, respectively, and appear to have settled to some degree in September.
Detailed look at flyers – average prices
Although the first rounds of price increases on the part of paper manufacturers were already introduced at the end of 2020 and beginning of 2021, online print shops kept their prices stable on average into the summer of 2021 and thus at the level of the first ZOPI survey (June 2020). It was only from July 2021 that the average price for 10,000 flyers in DIN A5 format, printed in four colors on both sides, rose gradually and consistently. In June 2022, the preliminary peak value was reached with a 26.28% increase over the ZOPI reference value. Since then, it has declined slightly, hovering at just below 25% in July, August and September, and just above 25% in September at 25.17%. However, only the next few months will show whether this “sideways movement” will actually continue and whether it is possible to claim a lasting plateau.
Detailed analysis of flyers – individual analysis
As always, the individual analysis of the online print shops surveyed reveals a more differentiated picture: While Vistaprint even charged a lower price (-0.18%) for the production of the 10,000 flyers described in September than it did at the start of the ZOPI, WirmachenDruck charged the highest price ever for the company for the same order in September of this year: 30.55% more compared to the index value and over 2% more compared to June ’22. At Unitedprint/print24, which had pushed through the biggest overall increase in recent months, prices again fell the most in the third quarter: after 60.82% in June, the company charged a price that was 46.20% higher than the ZOPI index in both July, August and September.
Onlineprinters and Saxoprint also saw prices fall, sometimes more significantly, sometimes slightly lower than in the second quarter: Onlineprinters charged 28.63% (September 2022) more, down from 35.40% in June 2022, and Saxoprint 36.38%, down from 37.10% in June. For Flyeralarm, Onlineprinters and sourc-e, the index value was slightly higher in September than in June: flyer orders were 14.09% more expensive at Flyeralarm in September than at the start of the ZOPI survey. Compared to June 2022 (11.31%), this was almost 3 percentage points. At 20.52%, online printing was still slightly less than two percent more expensive in September than at the end of the second quarter. On the other hand, sourc-e’s prices in September were again slightly over 2 percent higher than in June: 29.20% versus 27.09%. Only Redprintgroup’s prices for flyers have not increased since May, remaining at 21.13%.
Detailed analysis of the shopping cart – Average prices
A similar development to the flyers can also be seen when looking at the shopping cart. In addition to the 10,000 flyers, the shopping basket also includes brochures (32 pages, DIN A4, stitched, printed on both sides) and business cards (4/4 color, without finishing).
Here, too, the price increase reached its temporary peak in June: 29.66%. In September, the average price was slightly lower again, at 26.60% compared with the start of the survey in November 2020. Whether the “lateral movement” will continue in this area and the level can be maintained remains to be seen, of course.
Detailed analysis of the shopping basket – individual analysis
The biggest change compared to June 2022 has occurred at Saxoprint. While the company was still charging 28.51% more for the basket of goods at the end of the second quarter, in September it was 35.01% – an increase of 6.5 percentage points. Nevertheless, the biggest increase compared to the reference value of November 2020 was achieved by another company: Unitedprint/print24. Although the price for the shopping cart actually fell slightly here – from 42.63% in June to 40.98% in September – Unitedprint/print24 still marks the highest markup overall since the start of the ZOPI.
Speaking of markups, other online printers have also increased their prices for the shopping cart. At WirmachenDruck and Onlinedrucken, for example, the index values climbed only slightly from 29.59% to 29.83% and from 27.72% to 27.99% respectively, while the price at Flyeralarm rose somewhat more significantly from 23.46% in June to 26.54% in September. Onlineprinters, on the other hand, took the biggest step down, by just over 3 percentage points: From 27.55% in June 2022 to 24.29% in September. Once again, Redprintgroup remained the same in the shopping cart area. Here, too, it has consistently charged a price 28.17% higher than at the start of the survey since June.
And now?
Even if the curve in the zipcon online print price index in both areas, i.e. for flyers and for the shopping cart, did bend in the last quarter and one can assume a transition to a certain price plateau, it would be too early to speak of an all-clear.
Rather, it is important to be realistic: Paper prices and shortages will continue to present companies with major challenges in the coming months. It can also be assumed that prices for gas, oil, electricity and other types of energy will continue to rise. Saving energy is the order of the day, but this is certainly not possible on the same scale for companies in the printing industry as it is in other sectors. Especially for online print shops, which have already streamlined and automated their processes to a high degree, the savings potential will be manageable.
Don’t bury your head in the sand
All the more important is the fact that online print shops can address a wide range of different customer groups with their digital sales channels and provide them with easy access to print. Targeting specific customer groups? No problem with your own online store and a clever marketing campaign. Just like the production of print run 1 in a large standard, i.e. mass customization. The tighter the market situation, the greater the importance of targeting potential customers. Brand owners will increasingly put their advertising activities to the test in the coming months – in a similar way to Rewe or Obi.
This makes it all the more important to have answers at the ready to marketeers’ questions about the impact of print products and the potential of mass customization. Thanks to their expertise and high level of digitization, online print shops in particular certainly have a good starting point here – and should also start the next few months with a good dose of self-confidence. Even more so now that the Christmas business is in full swing.
