The first results of the 2nd drupa Global Insights Report “Touch the future – Applications that can create growth” are out now. Implementing new print applications is for many the best way to regain growth in the demand for print. Yet the result of implementing such applications is often disappointing. The 2nd drupa Global Insights report will show that good management practice in planning, integration and marketing delivers on average an additional $175,000 of annual turnover and $63,000 of additional profit compared with those with poor management habits. The report spells out what that good management practice should be and gives case studies to demonstrate the results in practice.
Best practice in implementing new print applications
About 750 printers from around the globe, who are members of drupa’s expert panel, participated in a survey this spring to explore what new print applications they had implemented and what their experience had been. There was clear evidence of the efforts being made to diversify with 26 different applications reported at an average 2.8 applications per printer.
Some applications offered a quicker payback on average than others and the differences were not explained by the size of the original investment. So for example in the publishing market, short run batch book production took on average more than double the time to payback than on-demand book production. And in the commercial market, business stationery applications took double the time to payback than multichannel marketing investments.
However in every market and with every application there were both successes and disappointments. So the survey asked printers how they had gone about the task in terms of planning, integration and marketing. There was clear and statistically valid evidence that good management practices meant that on printers invested on average $70,000 more but gained $175,000 extra annual turnover and enjoyed an extra $63,000 profit.
This was true in all markets and applications except packaging, where in some cases the evidence was that the reverse ie those adopting good management practices gained less than those who did not. This suggests making some new applications take off in the packaging market is more challenging than other markets for structural reasons such as the complexities of the supply chain.
In the report these findings are set against the backdrop of an analysis of changes in the global demand for print and how print must exploit the very digital technologies that are driving the way that people, brands, corporates and governments communicate.
The demand for print and the impact of digital communications
The world population whilst near static in many developed regions will grow overall for many years still, particularly in Asia and Africa. Add rising living standards and demand for print in many developing countries will continue to grow. Nevertheless overall global demand for print has fallen, in part because of sluggish economic conditions but largely because of the rapid growth of digital communications. The growth of the Internet is staggering – penetrating last year to 42 % of the world population with ever-wider use of both mobile phones and social media (51 % and 29 % of world population respectively).
There are fundamental shifts in the way that consumers communicate with each other and expect brands, corporates and governments to communicate with them. Print can be a key part in those multichannel communications, but only if print exploits the very technologies that are driving change. Hence print advertising has fallen over the last 5 years at 6% compound annual rate but consumer spending on print has declined by only 1.5 % compounded annually.
Print must exploit new applications with fresh print technology and automated workflow
New digital technologies are not only changing the way consumers communicate, they are changing the way that print can and must deliver customer needs if it is to remain relevant and central to communications. There are now more mobile-connected devices than people on earth. Data is now the core driver of increased business and handling and manipulating data must be a core skill for all printers if they are to thrive in the digital future. Print is still at heart a manufacturing industry and must combine data and intelligent devices with intelligent systems and automation to meet market needs.
Whilst analogue print will remain for many years to come, digital printing whether toner or increasingly ink-jet will be essential for growth and that in turn demands automated workflows. Printers’ business models must evolve in line with the changing technology and examples are given in the report such as on-demand publishing, digital packaging, textiles and interior decorations.
The full report will be released in English in a few weeks; the Executive Summary will be available in seven languages (German, English, French, Portuguese, Russian, Spanish and Chinese) at www.drupa.com.
1. Infographic: Global WebIndex quoted by We Are Social January 2015. McKinsey & Company Global Media report 2014
2. Infographic: drupa expert panel survey Spring 2015