State of the Sector: a discussion

The participants:

Andy Watkins, Wrights Plastics

Sue Weeks, chair 

Rob Kelly, Displayways

Stuart Maclaren, Your Print Partner

Man in glasses, top right is a PR person 

Richard Clark, Raccoon Graphics

Paul Simpson, writer

Ben Moss, Callprint

In the immortal words of Frank Sinatra, 2015 was a very good year – not for blue blooded girls of independent means but for Britain’s providers of wide-format print and services. Though the five industry chiefs at the Image Reports Widthwise round table had very different businesses – making everything from vehicle wraps to complex point-of-sale products and personalised Santa sacks – they all agreed that the market had been pretty buoyant in 2015. This wasn’t mere rhetoric – all of them were looking to recruit and several of them had made – or intended to make – acquisitions.

Location has played a part in this prosperity. As Richard Clark, managing director of Raccoon, the specialist vehicle wrapping and branding company with a production hub in Edenbridge, Kent, put it: “London and the South East is practically an economy of its own. We don’t have to look too far for business because we can feed and live off anything in and around London.” Yet Stuart Maclaren, managing director of Your Print Partner, said his company, which he started in 2012, has found a profitable niche printing on fabrics and making bespoke flags and is one of the fastest growing young businesses in Lincoln. Maclaren has had to go further afield in search of clients – and has used Facebook as a cheap, effective marketing tool. His simple idea of printing personalised hessian Santa Sacks, marketed on social media, led to him selling 10,000 sacks in the first four weeks.

It was clear that there is plenty of business out there, but there was a consensus that too many print service providers weren’t clever enough about how they won it. As Ben Moss, a director of – and investor in – print and visual communications specialist Callprint said: “The industry is very fragmented. There are a lot of family businesses and a lot of smaller businesses that don’t have a plan – they just do one

job after another, sell on their kit, don’t have time to develop the services that will help them grow, and sell themselves too cheaply. There are a lot of busy fools out there.”

Andy Watkins, commercial director of POS manufacturer Wright Plastics, echoed Moss’s view saying: “Many of these companies are lifestyle businesses. They will take business that pays for the machinery – and their operations – but haven’t got time to look for another clients.”

For Rob Kelly, managing director of bespoke print service provider Displayways, the business model was crucial. “There are cultural differences between the types of wide-format you can offer. For some, especially those commercial printers who are trying to come into the market, it’s all about large volumes and small margins. But for us, our next job is never the same as the last. We’re taking products to market that other people just can’t do. For example, we spent eight months on developing a permanent resin flooring you can drive a fork lift truck across.”

Providing bespoke solutions certainly makes it easier to retain a competitive edge – and for printers to move from being mere suppliers to advisers and partners. As Watkins said, “There is a niche market within every customer.” For him, the most fruitful strategy was to talk to clients and ask them: “What problems do you have? What can I help you with? Take a problem off a buyer’s hands – that’s what a lot of companies do.”

Clark had chosen a similar strategy although, referring to Moss’s “busy fools”, he cautioned: “Some companies say ‘yes’ to anything the client asks and waste a lot of time on non-profitable activity. You have to ask ‘what do want to do?’ That should be the work you make money on. That said, if a client comes to us and asks us to help, we will if we can. That’s how we got into vehicle hire. We had a lot of existing – and potential customers who were asking us for a vehicle wrap and having trouble renting the kind of vehicle they wanted, so we stepped in.”

This kind of client-driven diversification had, Moss said, become a game changer in the way the industry sells its services. “What we’re really selling is consultancy and project management, not print at a certain cost a square metre. To do that, you need intelligent, well-trained people who can go in to clients and sell your business to them. But they mustn’t come across as a traditional sales person – the kind you used to pay an agency £800-900 to find for you – because if you do that, you’re just a sales rep and the client isn’t going to buy from you.”

Watkins agreed: “People don’t buy from reps. You can open the door with a rep but once you’ve done that, you need someone who’s approach is more like an account manager.” Clark echoed this view, saying: “We’ve tried sales reps once or twice and they’ve failed miserably. You need client management skills, people who make sure the business comes in and goes out smoothly, rather than the traditional hunter/gatherer sales person.”

To illustrate his point, Moss said: “The key markets for us are sport, experiential and property. We’re doing a lot of corporate interiors and print is only one piece in the middle. To get the project you have to come up with the plan, deal with planning and technical specifications, before you even start printing. So we can charge for the added value, our project management. For many printers, it’s a revelation you can charge for your time.”

The participants had differing views on the advisability of offering design services. Clark said: “For us, it’s a production-focused service. If a client wants us to, we will take their collateral and manipulate it, but we’re not being a creative company that starts with a blank sheet of paper. The big challenge is charging for it. If you say we’re a print company and we do design, customers want it for free. I know you can keep them busy some of the time, but if you have your own designers are they a profit centre all of the time?” Kelly felt that it would be hard for a print service provider to recruit – and retain – the very best designers, who usually wanted to work in agencies, so the key was for printers to have the kind of creative who could help these designers turn their visions into print.

In contrast, Maclaren has gone out to hire designers because he believes they give him a competitive edge. At first glance, his company, Your Print Partners seems a simple volume driven business. His staple product is flags. Because buyers normally want a particular number, at a particular price, on the tightest of timelines, he has nine Mimaki direct-to-textile printers with which he can deliver quality quickly. Price competition is fierce – even on small orders, Maclaren says, “We’ve got to be cost effective because even on smaller orders, buyers will go to Poland. They pay upfront and what often happens is that, when the flags come back, the printer has changed the spec without telling them, and there’s nothing the customer can do about it. So when they tell us they’re going to buy in Poland, we let them, because they we know they’ll be back.”

Winning the work back is a moral imperative for Maclaren. “I want to keep manufacturing in the UK. That was my choice and why I started the business. We have clients that can place orders today knowing that we will deliver the right product tomorrow. Poland can’t do that – we can.”

Maclaren is not selling purely on price. He now has 19 staff, most of them recruited this year and all from outside the industry. Recruiting young designers and offering creative services to clients has proved a winner. He has invested hundreds of thousands in creating his own sophisticated logo vectorising software that he hopes to licence to other companies. Still only 26, Maclaren’s next audacious move is to launch a kind of Vistaprint service whereby the company hosts a range of designers’ work online for the end user to choose from. This was a very different business model to anyone else at the round table – although Clark confessed that he had looked at it but admitted that “for every answer, I had another question” – but it did suggest that the wide-format industry was still attracting the kind of entrepreneurial flair that helped establish it ten years ago.

All five businesses at the round table had invested significantly in the past year. For Kelly, the rationale was clear: “Printing machinery keeps improving year after year and you have to invest to stay in the game. The big stuff that we have bought new – such as he Mimaki 500 – we expect to run for five years but we bought them for quality, not speed.”

Clark says: “I’ve tried to turbo boost the business in terms of capacity and versatility.” Raccoon has relaunched its website, BigPrintFast.com, for creative and trade work, where customers can place small, low margin orders and pay upfront for work that is preflighted within the company’s workflow. To service that site – and to handle growing demand for vehicle wraps – Raccoon installed a new 3.2m-wide EFI Vutek LED UV printer and a 3.2m-wide Zund 3XL1600CVE16. With this firepower, Clark says he has the capacity and flexibility to deal with tight turnarounds. “Some of my production staff moan about last minute jobs but that’s what our business is built on. It’s the last minute nature of the work that costs the client money. In this industry, the more you can react on the front foot, the better you’ll do.”

Watkins says Wright Plastics, which has spent £500,000 on new large-format kit, has a different rationale for investment. “To a degree, we’re not as interested in speed and quality. For us, it’s about looking at what we do, identifying the bottlenecks, reducing waste and making sure we can compete with rivals from other regions, such as the Pacific Rim, where labour costs are lower.”

He could, he said, see the point of investing in 3D printing for instance: “We’re looking at it, purely for prototyping, because with 3D printing we can produce a prototype for the next day.” Though Clark and Maclaren were less keen on this technology, Kelly said Displayways is already showcasing 3D output in its ideas suite, while Moss’s group already runs 3D printers in Dubai. “The wow factor with 3D printing is amazing,” says Moss. “Agencies will talk to you for hours about 3D – it’s helped us win business for clients who don’t even use those machines.”

With 3D printing still a revolution in waiting, many of the round table participants had more prosaic technological priorities. Maclaren was interested in high-speed dye-sublimation and pushing the boundaries with UV inks that glowed at night. For Kelly, the priority was “better ink adhesion in general – it’s improved but it still needs to get better.”

When it came to looking ahead to 2016, technology wasn’t the focus of discussion. Watkins felt that, although retail remained a huge market, there was evidence that some of the bigger players were cutting back on their marketing spend. Though Kelly pointed out that the IPA Bellwether reports showed marketing spend still growing in 2016, Clark was cautious. “I don’t think 2016 will be as good all-round as 2015 but that it doesn’t mean it won’t be good for individual companies. Our industry gets its

business from large corporations and there are a number of factors – the EU referendum, a property bubble in London, what’s happening in China – that could make them jittery.” One of those factors, Watkins felt, was the introduction of the living wage: “Don’t get me wrong, it’s a good thing, but you’re talking about an 11% increase – and at some point prices are going to have to go up to reflect that.”

This was not a concern for Kelly who was more worried about price pressures from new entrants. “Commercial printers are coming into wide-format, with a low margin, volume model – and that, for me, is the biggest threat to our industry.”

For Moss, the bigger long-term challenge was the quality of its management. “Print is one of the worst sectors when it comes to governance. Too many companies are run by people who are good at production and live for the day and for the project. If you had more companies that took a strategic view, analysed things such as their average order, their top 20 clients and planned for the bad times, as well as the good, you’d have fewer companies failing.” The best plan for the bad times, Clark suggested, could be summed up in four words: “Cash in the bank.”

Yet, in the longer run, these five company chiefs all felt optimistic. Maclaren was especially bullish but there was agreement that, as Kelly said: “The perception of print’s value is going up.” The fear that swept through the industry five years ago – that screens would kill print – has receded. As Moss said: “There’s enough work for everyone – if you go out and get it and don’t wait for it to come to you.”