“Why should I go into online print? There’s no room for me anymore… “…I hear that so often. Strange, I have never ever heard of a print provider not buying a printing press because the others have already got one. It’s time to provide some proper clarification.
There’s online print and there’s online print, and as a modern-day decision-maker in the print media industry you need to understand that. Superficially speaking, you can divide the online print industry into e-commerce print providers (i.e. companies that sell exclusively online and handle their own production), print traders (companies that broker print products online) and online print providers (print providers that also sell online). Yet this rough and ready way of thinking hardly does justice to the topic of online print, because even these groupings can be subdivided into different business models and systems. Some opt to go down the sales branch route, while others focus on special products and others in turn focus on “having a local presence”. The market entry methods employed by the various online players are therefore as diverse as the print industry itself. It’s logical if you think about it. I will completely ignore the target audiences for now – I will devote blog space to the issue of B2C, B2B, B2B2C etc. another time.
So it is not really surprising that while the top 5 providers (Cimpress, Flyeralarm, Cewe, Onlineprinters and Unitedprint) are tussling for practically the same target audiences, more than 200 other, smaller online stores in D/A/CH are nevertheless earning money as well. OK, not the millions earned by the big boys, but if you consider the proportionality aspect, a print provider earning a couple of million in online print sales also does very nicely, thank you. Dr. Christian Maaß from Flyeralarm terms this distinction between major and small providers the “digital divide”. Smaller and mid-sized providers, usually around 40-50 million in online sales or even less, are to be found south of the divide. The Top 5 providers, with online sales of considerably more than € 80 million, are to be found above the divide line.
Overall, online print sales account for € 6.7 billion or 30% of total print sales in D/A/CH, according to my forecast for 2016. Of that figure, “just” €2.6 billion are generated via the open-shop channel, while the rest can be attributed to so-called “closed shops” – usually portals provided by print companies for their business customers. And now here’s the astonishing bit – while the Top 5 are set to grow in the open-shop segment by a total of 22% in 2016 – the primary reason for this is the issue of price and the launch of new products –smaller providers are set to grow primarily in the closed-shop segment. The reason for this is that many print providers (and above all their customers) have discovered the delights of online print as a “procurement and fulfillment solution” – backed up by the right software solutions.
“The market is a long way from being saturated – 70% of the print industry is waiting to be tapped online.” – Bernd Zipper
The “procurement and fulfillment solution” business model has been familiar to the print industry for some time now. However for many companies digitalization or rather provision of these services via the Internet is still “uncharted territory”. And here lies as yet unforeseen potential. While some customers zero in on the lowest price, others don’t necessarily want the “cheapest” product, but a print product that can be easily created and ordered online, and to go with that, a process that can be matched to customers’ needs and their ERP systems. Potential cost savings for business customers are therefore disproportionately higher than just saving a couple of Euros on purchasing. The reason for that is that business customers also economize and automate. The major business customers above all have long since recognized that personnel costs can be, shall we say, “optimized” (i.e. reduced) primarily by automating. Smart business customers know that as a result they can buy in print in a more managed and need-based fashion over the long term.
Another business model is the issue of “having a local presence” – I find www.heidno.de – Augsburg-based Druckerei Bayerlein’s online store – particularly cool. Here Christian Bayerlein has set up a local online store, which treats local customers to same-day delivery of the print products they order. Granted, quite a lot still needs to be refined or enhanced – but it’s not only the name that’s cool (“Heidno” is the expression “Heute noch” [sometime before the day is out]in the local dialect), so is Christian’s motivation of serving customers in the locality. The project is still in its infancy, but I believe it is only a matter of time before larger providers recognize the benefits of “daily delivery” and Christian Bayerlein starts providing B2B portals too. Other print providers that also operate online – I am thinking Berlin-based Laserline (laser-line.de) or Frontenhausen-based Ortmaier-Druck (flyerpara.de) here -focus to some extent on local customers and are pretty successful.
My take: So to return at last to the topic mentioned at the beginning of this blog post – the answer to the sceptical print provider’s question/realization, “why should I go into online print? There’s no room for me anymore…” is simple – yeah, right! What nonsense.
OK, there are bakery chains and mass-production bakeries, but there also bakers, who find their market niche by delivering quality and providing specialty products. And yes, there are barber’s shop/hair salon chains, but there is also the hairdresser round the corner, who is still in business. So here’s my tip – don’t let the prophecies of doom expressed by some sceptics put you off or upset you. If you have the right business model, the right idea or even just approach the issue of digital transformation at print companies smartly, then there is still room for print providers that want to offer their print products online – as well – in future. 70% of the print industry in Germany, Austria and Switzerland is not yet online. But if you want to play in that league, you need to start getting a move on. And perhaps understand that digital/online transformation is not an investment that you can just conjure up out of your cashflow or out of a hat, but rather that we are talking transformation of companies and the entire industry.
If you like, you can get to grips with this topic at my next Verband Druck und Medien Bayern Manager Seminar. This Manager Seminar will review the a.m. topics extensively.