Zippers Insights of the 6th OPS: Online at last – what now? Part 1

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What online print providers have to do now is compete and assert themselves in the marketplace. That is not exactly the easiest of exercises, as the 6th Online Print Symposium in Munich revealed. That’s because it involves a whole lot more than just printing. The 250 delegates were therefore presented with a wealth of eCommerce topics, which also illustrated print’s massive potential at the same time.

Even if keynotes normally set the tone for a conference day, post-event reporting does not necessarily have to adhere to the correct chronological order of presentations. This review is therefore kicking off with a presentation that not only really appealed to Symposium delegates, because it was both upfront and likeable, but also because it shed light on the many (to some extent hidden) details involved in the online pint business.

Green online print

Thomas Fleckenstein, CEO of Druckerei Lokay, highlighted the obstacles that a print provider has to negotiate if it enters the online print business. This is especially relevant given that the Odenwald-based print provider that employs 27 people has once again raised the bar for entry into this business model, which in any case is already set high. Lokay has been heavily involved in “green printing” since 2004 and is now one of Germany’s most well-known environmentally friendly print providers. In January 2017 it entered the online print segment with its www.umweltdruckerei.de brand – an ambitious undertaking in a market where “green printing” is not the highest priority.

Thomas Fleckenstein, Managing Director Druckerei Lokay e.K. Source: © Photo by Nadja von Prümmer / zipcon.de

So Fleckenstein also posed the question “whether that was what the market had really been waiting for?” and provided an insight into the company’s first year online. Although it can be described as sobering, it was not dispiriting. “Although 209 online jobs worth of 89,000 Euros in 2017, accounting for nearly 2 percent of our total sales, is not that awesome, this represents a good basis for solid growth”, said Fleckenstein self-confidently.

“Those who don’t want to compromise in terms of quality and the environment have come to the right people when they do business with us!” And he sees potential in this niche. This environmentally friendly print provider now offers more than two million sustainably produced print products in its store – environmentally compatible print using eco-inks produced in a socially responsible and fair manner. Blue Angel (RAL-UZ 195) or FSC certification can be arranged on request and every order is produced carbon neutrally at no extra charge.

Fleckenstein emphasized that the biggest challenges lie in the topic cluster involving time, budget, IT skills and human resources and last but not least in acquiring eCommerce, digitalization and automation skills, for example. He also sees a fundamental cultural change resulting from the transformation of the company, given that online production needs to be embedded into existing production methods.

“We have a very vanguard target audience. We focus on individuality, offer a narrow range of products but in a wide range of versions; we also meet special requests and prefer to look after our customers personally rather than communicate by hotline“, Fleckenstein explained. And he thus elaborated on the exact opposite of what characterizes a conventional online print provider – a wide range of products featuring a high degree of standardization and no variations.

But Thomas Fleckenstein therefore provided evidence that the “old-school” printing industry needs to adapt to modern times and must transform. That’s because those companies and online print providers (even those occupying niches) that have undergone transformation will determine the market of the future and are most likely to compete effectively.

Developments and trends

There are already losers in this transformation process, Bernd Zipper, CEO of zipcon consulting GmbH and co-organizer of the Symposium, stated in his annual review and outlook. At least that doesn‘t apply to online print providers, because online print continues to deliver the fastest growth rates in the printing industry. Open Stores in the German, Austrian and Swiss online print markets thus grew by 15.4% in 2017 to reach sales of 3.0 billion €, although the Top 5 at 1.47 billion € account for almost half of all sales. If you add sales generated by Closed Stores, i.e. platforms provided by print companies that operate dedicated stores on behalf of their customers, online sales generated in the D/A/CH region grew to 7.5 billion €. That means that online print already accounts for around one third of the market.

However Zipper forecast slower growth for the current year. He sees 2018 market volume at 7.85 billion €. As far as Open Stores are concerned, that still equates to an increase of 8.3% and 2.2% in Closed Store terms; yet Zipper sees a redistribution of sales that is retarding growth.

Bernd Zipper, CEO zipcon consulting GmbH. Source: © Photo by Nadja von Prümmer / zipcon.de

And he not only sees a redistribution but once again massive consolidation among print companies throughout Europe. Zipper therefore assumes that of the 34,000 print companies currently operating in Europe only 17,000 will still be in business by 2025. Of course he has not included very small businesses (with one or two employees) in these figures, yet if larger print providers also fall by the wayside, that can only be caused by one thing – ignorance”, Zipper says, “and the much-quoted and equally often misunderstood process of digital transformation”.

Digital and other forms of transformation

“Just because a company operates an online store, it has by no means already undergone the process of transformation”, Bernd Zipper explains. “I frequently come across companies misjudging their own progress.” In particular mid-sized online print providers in many places lack sufficient investment capital as well as the necessary infrastructure and knowledge. “Although IT thinking is required, the focus needs to be on eCommerce thinking if online print providers are to be successful“, says Zipper.

Or put another way – if you want to be sustainably successful in the agile online print market, you require strategies to build up and secure market share. Only companies that manage to embed new products, changed customer requirements, new markets and innovations in their strategies will be successful in the long term. “To do that, you actually need to have all topics on your radar”, stated Zipper in Munich and described the most important trending topics that online print providers need to get to grips with.

  • Multi-Play at all levels: just like brand owners have to operate as well as have a physical presence in all communications channels in order to reach out to their buyers, online print providers need to think about having an Internet presence that involves more than just operating a store. The “local online print provider” is becoming increasingly popular, says Zipper – as Flyeralarm has demonstrated with its “Print-to-go” offering. That’s because proximity to customers provides an extended form of service on the one hand and a more personal form of market access on the other.
  • Same-Day Delivery will put the online print sector under pressure in Bernd Zipper’s estimation, given that customers have high production quality and speed expectations. B2B customers will approve of same-day delivery while having to accept higher prices, but this will be restricted to metropolitan regions (as is already the case in the UK). Blanket coverage is likely to be difficult to implement in the foreseeable future.
  • Dynamic Pricing: dynamic pricing, which is dependent on customer profiles, ordering behaviors or customer journeys, has been in use in eCommerce for quite some time now. Even if certain customer groups tend to react negatively to this pricing version, dynamic pricing can be applied under certain circumstances to utilize capacity in the short term.
  • Market Access via Mobile End Devices: Zipper reminded the audience that mobile search results and load times are set to be of relevance to Google from July 2018 onwards. This leverage should not be underestimated, Zipper warned (not for the first time, by the way).
  • Digital Assistants are currently a hot topic and will doubtless have an impact on print. Even if Alexa, Siri or Google Home fail in, abandon or talk nonsense during the search for complex print products, that is still altering the behavior of users who no longer want to type in their search terms but who want to converse with their “assistants”. The same applies to searching for good-value business cards or service providers. Although we are only at the very beginning of the “age of assistance“, this trend, which goes beyond voice recognition and is an aspect of “machine learning“ and of artificial intelligence, is set to take hold.
  • Robotics is now already in evidence in several segments of the industry. No longer just in the form of “caged” robots that work alone but above all as collaborative robots that work together with people. This involves “legwork”, machine tending, loading and unloading, cutter robots, pick-&-place and much, much more.

Megatrend: mass customization

Robotics in particular are set to account for a substantial portion of the megatrend that is mass customization, Bernd Zipper firmly believes. Markets like packaging, labeling, textiles, promotion etc have already been virtually “fueled” by it“.

“Increasing customization of demand and the emergence of long-tail markets are forcing companies to reinvent themselves and achieve a new degree of flexibility. Mass customization is a key strategy in mastering this challenge”, says Prof. Dr. Frank Piller. He is Director of the Institute of Technology and Innovation Management at RWTH Aachen and has analyzed the way mass customization is put into practice at more than 200 different organizations in the last ten years. His conclusion: “mass customization provides a set of action options that can be applied in most companies.”

Successful mass customization is based, according to Prof. Piller, on a series of strategic skills that complement and enhance an existing business over time. He talked about this in his presentation using sports footwear manufacturers as an example. An impressive example: every year Adidas offers 8,400 footwear variants and it has recognized that mass customization has a massive impact on customer retention and therefore combines the purchase, usage and repeat purchase of its running shoes in a model that can be compared to a “subscription model”.

Prof. Frank Piller, Director of the Institute of Technology and Innovation Management at RWTH Aachen University. Source: © Photo by Nadja von Prümmer / zipcon.de

He emphasized that mass customization is exclusively based on the fact that people are different. “But nobody is interested in customization per se. They are more interested in the aftereffects and take a certain pleasure in configuring their own products.” A configurator needs to be as simple as possible to back up the buying experience.

But Prof. Piller does not see the innovators as being in manufacturing industry; online print has guided the mass customization market into a new generation.

Print mass customization

While Prof. Piller dealt primarily in his keynote with products from daily life that can be mass-customized, several Symposium delegates will have asked themselves whether classic print products can’t be similarly customized.

The answer came promptly. That’s because the Cologne-based start-up AutLay.com (AutLay stands for Automatic Layout) is now setting about revolutionizing the prepress process. AutLay is benefiting from the research work performed at Cologne University where business IT experts have been examining personalization and customization in the print industry for more than a decade. The outcome is completely new software architecture for automating layouts in realtime.

Dr. David Schölgens, Department of Information Systems and Information Management University of Cologne. Source: © Photo by Nadja von Prümmer / zipcon.de

“We convert content fully automatically into a ready-to-print document. This could be product data from a web store or PIM system that is intended to form part of a catalog”, Dr. David Schölgens, business IT expert at Cologne University and a member of the AutLay team, explained. “AutLay enables all benefits such as customization, cross-selling, up-selling, realtime marketing etc., which are familiar from an online context, to be used for the print communication channel as well. Fully automatic generation of layouts makes mass customization feasible in print too.” AutLay can also produce a customized newspaper from blog posts, says Dr. Schölgens. In this respect AutLay factors in various aesthetic criteria, which have been examined in the course of complex research projects and made quantifiable for computing purposes. “It is therefore possible to generate layouts that meet minimum aesthetic standards”, Dr. Schölgens stated and emphasized in particular that AutLay manages without templates – to date a constant bottleneck in prepress processes. That’s because templates are rigid masters, which have to date been required as “digital models” to define fixed and variable components such as texts and images.

In the case of applications like customized sales catalogs or magazines, this software is likely to reduce prepress time inputs and therefore costs substantially. This time benefit in turns releases time-to-market potential, customer needs in the sales process, and the haptic medium of print therefore reaches out to potential buyers quicker and in a more individualized way.

Retro product with a future

The word has already spread that the Online Print Symposium is more of a friendly and informal affair. Yet Oliver Kray, founder and CEO of MyPostcard, added another dimension to the proceedings in the conference hall. The way he talked about his business was a different world and a different language – and the way he acquainted the delegates with it was great.

Oliver Kray, Founder & CEO MyPostcard.com GmbH. Source: © Photo by Nadja von Prümmer / zipcon.de

In summer 2013 Oliver Kray, back then still a building facade artist in Berlin, was taking photos on the beach when he came up with his business idea. He wanted to send the digital photos on his smartphone as postcards, i.e. the analog way. After briefly conducting some research, he realized that some companies already offer this service. “But they are either too complicated or abysmal”, says designer Kray. So he decided to do it better – and set up mypostcard.com. “I find the idea of sending digital photos as real postcards just sensational”, Oliver Kray states, because the traditional way of sending postcards “is pretty old-school; you only find boring motifs, you always have to have a biro handy and then need to look for stamps and a postbox.”

MyPostcard, which was established in 2014, has already tasted success on the international stage. But less with printing itself – he leaves that to service providers – rather with his app-to-print service. Oliver Kray focuses on personalized vacation and greeting cards. His app enables people to send their own photos from their smartphones as postcards worldwide, and they look like they have been handwritten. But you can also send them from a desktop computer. The app and web versions feature several thousand ready-to-use designs, motifs and details that can be used solo or in combination with your own photo material.

The price: 1.99 Euros. “Yes, I know I am in the market with a two-dollar product“, says Kray. But he is convinced that his “retro product” has a future. “Even digital natives like cards that you can touch“, he says. And after all around 220 million postcards a year are still being sent in Germany – in the USA nearly 800 million.

And so to action! Oliver Kray got some coaching, did some number crunching and learned new marketing techniques to prepare his company for the US market. The US now already accounts for 10% of sales. From 2016 to 2017 these doubled to around 4 million € and are expected to grow as quickly in the current year. “Fortunately we have now reached break even and can now start earning money. But we will continue to invest money to achieve even faster growth and to put as much clear water as possible between ourselves and all our other competitors. I just want mine to be the best app and know that that ambition also has its price”, says Kray. “We quickly recognized that it’s not always just the product that’s important, but rather an understanding of how you acquire, analyze and bill customers and grow your business the quickest in order to be profitable.” For such undertakings to be successful you at any rate need to accept the fact that you have little time and require a great deal of perseverance as well as patience and power, is the advice Oliver Kray gives to anyone with similar aspirations.

Part 2 of Zippers Insights is coming soon…

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Zippers Insights from the 6th Online Print Symposium: Online at last – what now? Part 1
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Zippers Insights from the 6th Online Print Symposium: Online at last – what now? Part 1
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What online print providers have to do now is compete and assert themselves in the marketplace. That is not exactly the easiest of exercises, as the 6th Online Print Symposium in Munich revealed. That’s because it involves a whole lot more than just printing. The 250 delegates were therefore presented with a wealth of eCommerce topics, which also illustrated print’s massive potential at the same time.
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www.beyond-print.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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