EDP Survey - The Findings

In the second quarter of 2012, the EDP - a group of 13 digital printing publications from across Europe which includes Image Reports in the UK - commissioned InfoTrends to poll its joint readership about the nature of their businesses, their business outlook and investment plans.

The EDP titles focus on digital print so the audience is by definition mostly digital printers. To ensure all respondents were using a digital device, however, a question was used to exclude responses from those not yet running digital.

The respondents reflected the make-up of the greater print industry, primarily consisting of small businesses, with the largest group being operations with 1-5 staff. By type of operation, more than half exclusively operate wide-format equipment, less than a fifth purely small-format, and the remaining one-third operate both types.

Most firms completing the survey have been using digital printing technology for more than five years. Large-format is more likely to have been adopted early on, although those firms coming from small-format analogue backgrounds are more likely to have started with a small-format digital device. Firms running both technologies show a clear tendency to be earlier adopters, compared to those purely using small-format digital.

First came Image Reports’ Widthwise 2012 large-format market report, now comes the EDP Survey 2012, which marries the findings of the first with the results of a wider-reaching European survey.

The Widthwise Survey (http://www.imagereportsmag.co.uk/ widthwise-2012) undertaken this spring showed that despite the general economic landscape, wide-format print was doing OK – better than OK! Similarly, the respondents to the EDP survey - and, by extension, the digital printing sector as a whole – showed they were in pretty good shape. Small and large-format digital markets are dynamic, and the firms that are operating within them highly competitive but of course they are not immune to economic woes; pricing pressure and margin erosion are constant threats. But, the results of the EDP survey also indicate that there is a high priority placed on finding new markets and applications, and offering new services to clients that is driven by the need to grow the business and improve margins.

Behind that drive for growth are a range of strategies largely led by additional service offerings that complement print production topped by design, installation, as well as personalisation and versioning. There is also evidence that firms that are changing strategically and taking an approach that goes beyond print’s historic focus on product-led innovation. Heading the list of approaches to win new business are changes in sales and marketing, including working with suppliers and spending more time on research and learning.

Investment focus

Wide-format production is dominated by solvent inkjet printing, followed by aqueous technology - a reflection of the dominant technology and the small size of most operations. There is also a good uptake of UV-curable inkjet devices. Small-format production is dominated by cut-sheet colour devices, with production printers, digital presses, and 45+ ppm multifunctional peripherals (MFPs) as the predominant devices.

While firms are not taking a production and technology-led approach to their strategic development, they still recognize the need to invest in equipment and other tools to remain competitive. About 38% of firms are expecting to invest more in the future, and only 17% are expecting to invest less. Given the dominance of large-format users in the respondents, and the strong interest in wide-format even amongst firms that have yet to adopt it, it is unsurprising that nearly half expect to invest in a new wide-format printer in the next two years.

It is also indicative of the nature of the wide-format market that even companies that are already well-invested in the technology recognise the need to continuously reinvest in order to maintain highly competitive image quality, production speed, and low running cost capabilities. The leading drivers for investment and the requirements for what benefits new equipment delivers are lower running costs and improved reliability/uptime for both wide-format and small-format printers. There is also a desire for higher speed, higher quality, and lower capital equipment costs.

In wide-format latex printers dominate plans, with a third of firms expecting to invest in the technology; UV flatbed comes in at a close second with 31%, and solvent a near third at 27%.

The strong showing of UV curable flatbed printers (31%), not much behind the interest in latex, highlights how wide-format PSPs are looking for products that allow them to enhance their offerings. The application flexibility of these direct-to-substrate devices and the wider choice of materials that they can print onto offers PSPs ways to add value while reducing process steps and, therefore, complexity and cost. UV-curable is also capable of the fastest production speeds, enabling wide format print shops to turn jobs around very quickly, a key requirement in today’s market.

Despite the strong interest in latex and UV flatbed technologies, there is still a strong requirement for solvent printers (27%). This reflects two key aspects of solvent inkjet; first is their position as the ‘bread and butter’ devices of the wide format sector and their continuing place as proven workhorse machines, second is that leading vendors are making steady speed and image quality improvements in eco-solvent printing technology.

The low showing of textile printers in investment plans is surprising. It may reflect that PSPs are cautious, or that they are expecting the other technologies, such as latex and UV, will be able to produce their soft signage applications, reducing the need for a dedicated device. Likewise, the low level of interest in aqueous printers reflects that market’s maturity and, for PSPs, the advantage other technologies offer in terms of lower operating costs, higher throughput, and broader application range.

Compared to wide-format investment, small-format investment is being considered by far fewer firms as 59% are categorically not looking at buying a device while just 16% expect to.

Dominating small format investment plans are cut-sheet colour printers, either production printers or 45+ppm MFPs at 30% and 28% respectively. Digital press investment intention is lower at 17%, again a reflection to some extent on the small size of many respondents, making these devices both unaffordable and over specified for their requirements.

Echoing the strategic decision outlined earlier to add creative services is the large number of sites (35%) investing in design software to support their wide-format printing. Close behind at 29% is workflow, showing how it is becoming increasingly important in the wide-format market. In the small-format market, workflow software dominates investment plans, with 38% looking at that area - closely followed by Web-to-print and design at 33% each.

While there are differences between the types and sizes of operations, it is notable that the majority of firms intend to invest €24,000-€89,999. Again, this is a reflection of the small size of most operations. Generally, more established firms expect to spend more, probably due to the need for additional capabilities if they are to continue to differentiate themselves.

Sustainability

When it comes to sustainability, printers’ commitments broadly match client sustainability expectations and it is generally seen as an important issue that is climbing up the agenda.           

Accreditation is an exception rather than the rule, which is likely to be due to the small size of most operations and the lack of suitable schemes for businesses of that size. Many firms are good at sustainability, but are not strategically aligned.         

Sustainability is showing a clear trend towards being a more important issue. Despite that, there are a quarter of firms who do not see it as important or as less important than before.

Looking at the responses by type of technology owned, it is clear that wide-format firms are more attuned to sustainability concerns, with more seeing the issue as being more important than before or having no shift, but is still important. Wide-format firms are also the least likely to see it as not important or not being more important than before.

Small-format printers are most likely to say there has been no shift in importance (38%), and, of those, more than a fifth (22%) do not believe sustainability is currently important, nor is it becoming more so. This suggests that there is a strong core of the industry that thinks sustainability is a fad and is not a serious issue.

Those firms with both processes are also likely to say sustainability is less important than before. It may be that these firms are more attuned to market sentiments and have found that their customers’ opinions have changed in light of the harsh economic reality.

Steps to improve environmental sustainability

The behaviour of firms on the ground shows some clear examples of “green” practices. About 58% of firms have taken steps to reduce energy consumption, while 49% have implemented measures to reduce or recycle waste. Both these actions have a benefit in reducing a firm’s environmental footprint, but it is likely they have been undertaken primarily as cost-saving measures.

Given that while so many firms have undertaken those activities, only 40% say they have actively taken steps to reduce their carbon footprints. This suggests there is a misunderstanding about sustainability and how many of its objectives are aligned with other good practices, such as efficiency and cost saving.

The fact that few firms (8%) have employed an external consultant to help with sustainability and only 23% have measured their carbon footprint indicates that, for most firms, there is not a cohesive sustainability strategy in place. Paying attention in this area - and, in fact, providing tools and advice in this space- could be a useful way of adding value to firms that would help them align efficiency, sustainability, as well as sales and marketing messages.

Sector by sector analysis produces some additional insight. Firms running both wide- and small-format processes are more likely to reduce energy consumption (69%), while small-format firms are more likely to reduce and recycle in-house waste. They are also far less likely to report intentionally using recyclable or recycled products, despite undoubtedly being bigger users of paper than wide-format operations. This is quite surprising as these firms are using a material that is fundamentally recyclable and more easily obtained in recycled grades than other materials.

Small-format firms and hybrid operations are more likely to use paper-based materials from certified sustainable sources carrying the Forest Stewardship Council (FSC) or Programme for the Endorsement of Forest Certification Schemes’ (PEFC) chain of custody certification. This number is around half of small format users, compared to less than a quarter of wide-format only firms. Again, this is a reflection of the greater use of paper-based materials and wider awareness in the small format market of Chain of Custody (C-of-C) schemes. Lastly, despite an apparent attitude that is less concerned about sustainability, they are more likely to have engaged an external consultant to help implement sustainability.

Overall Findings

The findings show a progressive group of businesses across Europe that is operating digital print. There are challenges and, as more firms currently operating in small format print eye the opportunities in wide-format, that market will become more competitive. The general picture that is emerging, however, suggests that most firms currently operating digital print - regardless of format - have a good idea of the strategy needed to evolve that is not reliant entirely on price and productive equipment. These companies may be well placed to meet the challenges ahead.

Key Findings

• The broader economic situation dominates printers’ business worries. Nevertheless,digital print is a growth market and offers opportunities for businesses to prosper. In particular, wide-format is perceived as a strong potential market.
• Small-format firms see a greater need to diversify and, as a result, wide-format takes on more importance for them. This can be seen in the prevalence of more firms from this background moving into wide-format, whereas small-format attracts little interest from wide-format printers.
• The printer’s sustainability commitments broadly match client expectations. While their sustainability actions are often good, they are not strategically aligned and they are unaware of the extent of their own achievements.