Executive Summary

• World Wide Survey 4 respondents cut across the wide format industry and mirrors the overall structure of the industry, with a large number of small companies, and a good distribution among medium-sized, large and very large establishments.

• The fact that this industry is "bottom-heavy" has many important implications in regards to what types of equipment these companies can buy, where they source materials, and how they manage cash and inventory. Different sized PSPs handle these issues very differently. Recognition and adaptation to these differences will make sales and marketing efforts more successful.

• One of the key trends in the digital wide format market is that there is an ongoing convergence among historical printing segments, yet respondents tend to still think of their business based on its history.

• Respondents reported the highest levels of optimism for both their own business and for the wide format digital printing business in general since the inception of the World Wide Survey project began in 2007.

• InfoTrends believes this is a reflection of the fact that many PSPs had taken the strategic actions required to sustain their business through the economic downturn and even through periods of great uncertainty related to the global economy in the last 2000's. 75% of the respondents reported that they have made strategic adjustments to their business to offset business declines due to the overall economy over the last several years.

• Respondents expect wide format digital printing to grow as a percentage of their total revenue from 42% in 2013 to 54% in two years and almost 50% of respondents reported that they see digital printing as the key to future success in wide format.

• InfoTrends believes the survey results point to a new definition of what "going digital" should mean to printing organizations. Whereas once "going digital" meant using a digital printer to produce the same kind of graphics that were screen printed because there was a cost advantage for doing so, now we think it means that the company should develop its data-driven resources to help its clients achieve their goals for revenue generation, experiential marketing, or operational efficiencies.

• 51% of respondents reported they would make an investment in new hardware in the next 12 months. InfoTrends believes this finding has multiple implications, but the primary one is that shops recognize that new wide format production technology gives them the ability to be more competitive through greater speed, higher quality, and lower production cost

• The primary wide format applications have not really changed over the years, posters, signs, banners, and point-of-purchase (POP) graphics continue to be the primary applications that digital wide format printers produce.

• Wide format digital printing is still a growth market because it gets growth from two sources; from the conversion of analog printing to screen printing, and the organic growth within key wide format digital applications.

• InfoTrends has found that there are two important barriers to success in wide format digital printing for many PSPs. One is that they struggle to keep up with technology and how it can be used to grow their business, and the other is that they are unsure of the best ways to market and sell their services.

• There are several ways to approach marketing wide format print services, Outbound marketing, Inbound marketing, and Nurtured. Increasingly InfoTrends sees wide format PSPs using Inbound marketing, which includes relevant information and content targeted at the types of customers a PSP wants to attract. Marketing expenditures are typically less than 4% of a PSP's total sales.

• Ink jet printhead technology is very important to the buyer. 92% of respondents reported that the inkjet head is either "important" or "very important" to them when they are sourcing digital printing equipment.

• HP (58.9%) and Epson (54.2%) were the most often recognized print head brands among these respondents. This is not surprising given the massive installed base of aqueous inkjet printers from these two vendors. The Xaar brand was recognized at the third highest level (53.4%) which has to be considered an achievement given the company's independent status. In fact, among the group of PSP respondents that identify themselves as Digital Print Specialists and as Sign Shops, Xaar was the MOST recognized print head brand.

• Only 26% of the respondents reported that they are a member of a trade association now. 3/4ths of respondents are not members of a trade association which means there is an excellent opportunity for local industry associations to increase their membership by increasing the value that association membership provides.

• FESPA is already a vital source of information for many PSPs. 65% of respondents reported that they usually hear about new industry developments through attendance at FESPA exhibitions. This is higher even than Internet web sites (42%), equipment dealers (42%), or trade journals (39%).

• 83% of respondents reported they would like to receive more news and analysis from FESPA. InfoTrends believes that the development of web-based resources that are respectful of the time that shops invest would be an excellent way to deliver this sort of news and information.

Introduction

The World Wide Survey is a collaborative project between InfoTrends and FESPA that is designed to provide market intelligence to the wide format digital printing industry. This is the fourth iteration of The World WideSurvey. The survey respondents come from all over the world, but 3/4ths are based in Western European nations, so the information herein is certainly oriented towards the European market. The Worldwide Survey 4 was conducted at the end of 2012 and the beginning of 2013 using electronic survey tools that reached out to users ofwide format printing equipment around the world. The survey was issued in four languages, English, German, Spanish, and Portuguese. More than 250 establishments completed the electronic survey. InfoTrends has analyzed the responses to The World Wide Survey 4, executed data cleaning processes, compared these results to previous iterations of the survey findings, and attempted to place these results in context of the global wideformat market within this report.

The digital wide format business is valued at more than $100 billion on a worldwide basis at print-buyer level and there are hundreds of thousands of establishments that serve this dynamic business. Wide format printing is at once growing, through the conversion from analog to digital printing, and experiencing organic growth through the developing technologies within the market. Wide format is a highly competitive market, yet there are segments, applications, and business models which can precipitate significantly enhanced revenue and profit margins. The growth and profitability of wide format continues to draw new suppliers and print service providers into the market, which accelerates the pace of development and change within the wide format business.
InfoTrends and FESPA are happy to provide the results of the World Wide Survey 4.

Respondent Profile

It is always important to consider what types of companies responded to any survey instrument. The following are some of the key characteristics of the respondents and there is a more complete respondent profile within the Appendix section of this report.

• We believe the data within the World Wide Survey has a lot of value because the respondents cut across thewide format industry and mirrors the overall structure of the industry, with a large number of small companies, and a good distribution among medium-sized, large and very large establishments.

• The average number of employees among the respondents is forty-one. 46 percent of shops have fewer than 10 employees.

• The fact that this industry is "bottom-heavy" has many important implications in regards to what types of equipment these companies can buy, where they source materials, and how they manage cash and inventory. Different sized PSPs handle these issues very differently. Recognition and adaptation to these differences will make sales and marketing efforts more successful.

• Respondents reported an average annual turnover of 3.76 million euro which equals 3.16 million GBP or approximately $5 million USD. However, 58-percent of respondents reported annual turnover less than 740,000 Euro. The distribution of respondents by company turnover closely follows the distribution of company size by employee count.

• Probably the most important distinction among the respondents is how they categorize their business. One of the key trends in the digital wide format market is that there is an ongoing convergence among historical printing segments, yet respondents tend to still think of their business based on its history. The chart shows that there are a number of types of printing establishments serving the wide format business.

What type of establishment do you work in?

A key question for equipment and supplies manufacturers is how to reach across some of these historical boundaries because each of these vertical segments have historically had their own suppliers and distributors. As these segments increasingly "come together" to compete in the wide format business InfoTrends expects an increasing level of partnerships as well as merger and acquisition activity designed to meet the needs of the converging marketplace with higher levels of efficiency.

General Findings

Respondents reported the highest levels of optimism for both their own business and for the wide format digital printing business in general since the inception of the World Wide Survey project began. InfoTrends believes this is a reflection of the fact that many PSPs had taken the strategic actions required to sustain their business through the economic downturn and even through periods of great uncertainty related to the global economy in the last 2000's.

On a scale of 1 to 10, 10 being "very optimistic" and 1 being "not at all optimistic," how optimistic are you for the future of the wide format industry sector?

75% of the respondents reported that they have made strategic adjustments to their business to offset business declines due to the overall economy over the last several years.

Another important general finding is that respondents are increasingly "going digital" and expecting digital wideformat printing to represent a larger part of their business. While InfoTrends does believe that, slowly, digital printing is replacing a lot of screen print volume, it also means that digital printing and the services that surround it represent the key revenue growth area for many PSPs. There are a set of connected research results that illustrate this point.

• Respondents expect wide format digital printing to grow as a percentage of their total revenue from 42% in 2013 to 54% in two years and almost 50% of respondents reported that they see digital printing as the key to future success in wide format.

• An equal number of shops (32%) that do screen-printing reported they are seeing screen-print volume decline and grow. 36% of shops that offer screen-printing reported seeing no change in screen print volume. Less than 3% of respondents reported that screen-print alone would be a key to future success in wide format.

• 23% of respondents indicated they see "hybrid" printing services, or the ability to offer both digital and screen-print as the key to future success. 25% of respondents reported they see the key to wide format success is in adding digital services and migrating to more of a marketing services provider.

Where do you see the future success of wide-format 

InfoTrends believes that what develops is a new idea of what "going digital" should mean to printing organizations. Whereas once "going digital" meant using a digital printer to produce the same kind of graphics that were screen printed because there was a cost advantage for doing so, now we think it means that the company should develop its data-driven resources to help its clients achieve their goals for revenue generation, experiential marketing, or operational efficiencies.

While the concept of "going digital" is more all-encompassing than simply making an investment in digital printing hardware, wide format digital print hardware is an important component of the service offering. The World WideSurvey asks respondents about their buying expectations, both in terms of their plans to make new hardware investments and in what types of hardware they plan to invest in. 51% of respondents reported they would make an investment in new hardware in the next 12 months. InfoTrends believes this finding has multiple implications.

• That many shops still using printers based on solvent inkjet print technology are seeking replacement technology, both because the market for solvent inkjet printing is low-margin and due to health & safety regulations.

• That shops recognize that new wide format production technology gives them the ability to be more competitive through greater speed, higher quality, and lower production cost

Of those, the most common types of hardware these shops expected to invest in is UV-curable inkjet, eco-solvent inkjet, and Latex inkjet. Similarly, when shops to ask what percentage of their production is done using which technology we see a transition away from solvent inkjet and aqueous inkjet, and towards UV-curable inkjet, eco-solvent inkjet, and Latex inkjet. InfoTrends believes this is because these three technologies offer the ability to meet the most compelling customer demands for high image quality, fast turnaround, and low running costs. The chart also illustrates the expectation that many shops have in terms of their shift away from analog/screen production.

Thinking just about wide format graphics printing, approximately what percentage is produced using the following methods now, and what do you expect that to be in 2 years?

Of course a part of the expectation on equipment investment is a consideration of what types of applications the shops will be producing. The World Wide Survey 4 asked a series of questions about the applications that are produced using wide format digital printing systems. The primary wide format applications have not really changed over the years, posters, signs, banners, and point-of-purchase (POP) graphics continue to be the primary applications that digital wide format printers produce.

This finding gets right to the heart of the matter in the wide format market, and that is that wide format digital printing is still a growth market because it gets growth from two sources; from the conversion of analog printing to screen printing, and the organic growth within key wide format digital applications. The chart below illustrates how particular applications such as textiles for soft signage, point-of-purchase graphics and commercial/domestic interiors are among the fastest-growing applications within these wide format print shops. The textile and commercial/domestic interior applications are particularly interesting because they represent significant new application opportunities. InfoTrends notes that textiles for soft signage are a growth market because many retailers are seeking signage and graphics prints that feature improved sustainability properties and lower cost of ownership. Textiles for soft signage have both of these attractive properties because many digitally printable fabrics are recyclable and because they are fabric, they are lighter weight so they are easier to fold up and ship in smaller boxes so the costs to ship them to the location where they will be used is lower. 

Which of these applications are growing and which are declining as a percentage of your wide format printing business?

The other key finding on this chart is that none of the applications identified are declining faster than they are growing according to the survey respondents. InfoTrends believes this is a result of increasing buyer preferences for versioned wide format prints that reflect regional preferences and the increasing seasonality in market such as retail that drives a lot of promotional wide format printing.

Findings for PSPs

InfoTrends has found that there are two important barriers to success in wide format digital printing for many PSPs. One is that they struggle to keep up with technology and how it can be used to grow their business, and the other is that they are unsure of the best ways to market and sell their services.

There are several ways to approach marketing wide format print services, Outbound marketing, Inbound marketing, and Nurtured. Nurtured marketing means that the company is providing such excellent service and support to its customers that it is growing its business without having to find new customers. This is the least expensive and ideal way to grow. Outbound marketing includes traditional print advertising such as direct mail, as well as telemarketing, and radio and television advertising. The challenge with outbound marketing is that it is typically expensive, driving outbound marketing means adding to the marketing budget. Increasingly InfoTrends sees wide format PSPs using Inbound marketing, which includes relevant information and content targeted at the types of customers a PSP wants to attract. This content is delivered in multiple ways, through association forums and conferences, on social media, through landing pages and case studies. There is an expense to inbound marketing, both direct and indirect costs, but this is an increasingly effective way to dedicate marketing resources which are, on average, less than 4% of a PSP's total sales.

What is your annual spend on marketing as a percentage of turnover? 

PSPs use many ways to market their business now that are a mix of inbound, outbound and nurtured. Word-of-mouth is the best way for any company to spread the word about its services because getting recommendations from known and trusted sources is very important to buyers. Every company should ask its best customers to provide recommendations in appropriate situations. 64% of respondents to the World Wide Survey ask for recommendations. Since wide format digital printing is primarily a B2B business is makes sense that direct marketing/direct sales are the second most-commonly used tool used to market these services.

What tools do you use to market your business?

Another important finding that is key to marketing and selling wide format services is understanding the print buyer and the roles of people in client and prospect companies that influence buying decisions. The data from the Worldwide Survey 4 shows that there are people in marketing, merchandising, and other roles at an organization that play as much a role as those designated professional print buyers.

What percentage of your key client contacts are ...?

Finally, InfoTrends believes that many print shops don't take nearly enough advantage of their position as customers and prospects to global manufacturers. Many suppliers to the wide format digital printing market and their dealer/distributors have developed educational tools that print shops can use to grow their business. Many shops are looking for new markets and seeking new skills and capabilities, but fail to push their suppliers to help them develop those capabilities. The data shows that large wide format print shops, those with higher numbers of employees, are more likely to take advantage of the educational and training opportunities that large manufacturers have developed than small companies. There are probably good reasons for this, as small companies simply don't have the time or resources to dedicate to training but also because larger accounts would get the priority on these types of sessions that manufacturers offer. InfoTrends suggests that on-line learning and demonstration tools could be deployed to make up the disparity between smaller and larger organizations.

Do you participate or have you ever participated in manufacturer- or dealer-sponsored training events?

InfoTrends' Opinion

The results of the World Wide Survey 4 illustrate many of the trends that InfoTrends has identified over the years which encompass competitive, strategic, and technology and innovation. The results show that many of the players in the wide format market have developed a strategy to adapt to change by employing the latest technologies to find new markets where there are greater revenues and profits. FESPA and its local associations serve these suppliers by providing information and resources where opportunities are identified and strategies are developed.

 For the full version of The World Wide Survey 4 click here and become a member of FESPA