Welcome to 2018! We like to usher in the new year with our annual predictions post. It’s an opportunity for us to share the thoughts of experts throughout the industry. So let’s not waste any time - let the prognostications begin!
The stock market isn’t the only thing that’s up. Optimism among strategic and financial buyers of print-related businesses is way up, too. The LaManna Alliance is doing 2-4 valuations and assessments per month, and there’s no end in sight.
Confidence is very high right now, and private equity and strategic investors are frothing at the mouth to acquire new growth opportunities. I’ve witnessed multiples for flexible packaging and niche label companies that are selling in the 9 to 10 range (last year they were typically around 4!)
If you have a niche, a profitable and efficient company and a plan for growth, the world is your oyster. Investors are not looking for turnarounds, folks. They want companies that have grown and will continue to grow in the future, and there are plenty out there.
So how do you capitalize in 2018? The winners will understand that it’s not about equipment, or capacity. It’s about skillsets and talent. It’s about people, strategy, execution and cash. Get out of the mindset of being operations-organized, and start thinking in terms of sales and marketing. You need to invest in the future, and create a culture shift from operations to sales and marketing.
It won’t happen to you overnight, but if you get your ship righted (or build on what’s already driving your success), you could be cashing in on a double-digit multiple in 2018. Do. Not. Delay!
Whilst the digital printing industry has gone through a significant period of transformation, many label and packaging printers have yet to take advantage of these improvements. This will change in 2018, with an increase in print manufacturers exploring innovative label and packaging solutions that benefit both profit and sustainability.
Firstly, as businesses are increasingly using personalization to boost brand interaction, digital media engagement and sales - benefitting from the emotional connection made with the customer - I envisage a surge in food and beverage brands running personalization promotions.
Almost two-thirds of all printed packaging is used for food and drink applications, so by combining the pull of personalization with the developments in technology solutions that allow for mass personalization, brands can access a powerful marketing tool (highlighted by examples such as the successful Nestlé U.K. KitKat personalization campaign, which resulted in 56,000 custom-made wrappers).
Secondly, more brands are looking to achieve a successful sustainability programme to ensure they remain competitive within their markets, so they will need to guarantee that sustainable practices and technology are implemented in every step of their supply chains.
By using fewer resources and achieving greater efficiency, they can reduce the carbon footprint of their manufacturing and meet their sustainability goals. In addition, whilst we have all heard of ‘green’ technology, we predict that 2018 will bring about greater awareness of emerging ‘blue’ technologies, such as electron beam curing, which enables print manufacturers to increase throughput, efficiency and sustainability to secure benefits to both the bottom line and the brand image.
Lastly, I foresee that in 2018, more brands will want to be associated with good manufacturing practice and safety standards, meaning we will see more initiatives that aim to identify products and processes which guarantee a constant high quality result or outcome.
Keynote Speaker and Author
Todd Cohen - Building Sales Culture
2018 is the Year of the ASK! I have seen and heard about all the new “miracle ways” of selling this past year. Here is a newsflash – there is NO silver bullet for more sales. There is NO one new thing that makes the difference that we have always been seeking. Not to say that there aren’t innovative ideas and concepts out there. There are plenty of things that help make more sales – things we can do in parallel with good basic sales activity. Examples include a solid social media strategy, learning to be a better presenter and consistent self-improvement.
Given these actionable things any individual can and should commit to, there is one rock solid and time proven action that will yield more, improve results and help your confidence skyrocket. It’s called asking for the order. I have seen salespeople become so caught up in the detail and weeds of sales activity, reporting, metrics and so forth that they have simply forgotten to just ask.
Asking can be a frightful thing. It means you might hear a “no.” It will make you feel insecure and defensive. It creates a sense of rejection. Get over it. Here is a little-known secret. Your clients want to do business with you and often just don’t know HOW. In other words, they are ready to sign and need you to ask for the business and show them the way to complete the deal. Asking also turns people into what I call the “sales apologist.” We become afraid to ask because of the fears mentioned above. We make excuses for not asking and then apologize for asking for what we have earned the right to ask for! It happens all the time and is such a waste of talent and potential.
2018 must be the year of the ASK. The year we regain our confidence to ask. The year we embrace your right to ask for what you have earned the right to ask for. The year you take control and show your customers how to begin a long and beneficial partnership. It’s the year we stop apologizing and start asking.
2018 will see more convergence of print programs. Digital continues to lead the print industry. The value will be in the ability to help your customer sell services and improve communications. Wide format and display graphics is becoming more prominent. Digital processes are allowing print applications to be shared across multiple devices. This allows the PSP the opportunity to increase their service offerings.
As far as what is in store for the future, I am increasingly impressed by LED/LCD, electronic display technology. This will be the future of dynamic messaging and marketing.
Orazio “Omike” Fichera
Smaller Dealerships that are owned by the business-oriented, technically knowledgeable will survive. Those that are not will sell out, shut down or merge.
With that said, we need to view the space in which smaller channel manufacturers are working. Many of them have as few as three salespeople calling on dealers that reside in every city and state across the U.S.
Low marketing budgets prevent smaller manufacturers from providing direct-to-dealer product and goodwill to support their sales force. Manufacturers that have let their salespeople go are attempting to base their hope for survival on internet geeks who promise a great website and google ads leaving no budget for ongoing Corporate-Product Branding.
So Prediction #2.....Smaller Manufacturing Companies can survive by seeing themselves as specialists in a given category of product, and make use of every means to communicate and be part of their dealer channel. As Meg Whitman, CEO H-P,0 once said: “Communicate. Communicate. Communicate.” Unlike many leaders who become less visible in times of turmoil, Whitman stepped up at every phase of the turnaround and clearly communicated the strategy and her expectations for employees and (dealer) partners.
Technology Journalist and Blogger - Printvergence
The digital transformation of printing will continue in 2018. It is being driven partly by generational shifts in how consumers live, shop, travel, and learn about new products.
Millennials, who are expected to control about $1.4 trillion in spending by 2020, are less inclined to accumulate possessions. Instead, many spend disposable income on experiences, well-being, and self-improvement. Millennials are less susceptible to traditional branding and more willing to buy high-quality private-label products, including food, health, and beauty products from start-ups. They are also aware that many products can be customized to their tastes.
The buying preferences and mobile-first communications habits of Millennials are causing massive disruptions in retailing, marketing, manufacturing, publishing, entertainment, travel, and hospitality. Your printing business should prepare to deliver a different mix of products, services, and solutions to customers within these industries. And like manufacturers, brand-marketers, and retailers, you will be expected to operate at the speed of the Internet.
Here are five trends that will continue in 2018 and beyond:
More Orders for Shorter Runs: Printers that expanded into cross-media marketing services in the 2000s understand that the role of printing is changing in the world of 24/7 mobile communications. Printed pieces that are unique and remarkable don’t have to be printed in large volumes if they can attract a large audience on social media.
More Requests for Connected Print: Marketers discouraged by the poor results of digital marketing now see the value of connecting digital marketing channels to real-world channels such as packaging, print advertising, and signs. If interactive links on a magazine or outdoor ad enable consumers to immediately order a product they like, the “point-of-purchase” can literally be anywhere a consumer wants it to be.
An Expanding Role for Creative Technologists: A lot of experimentation is underway, as new types of creative agencies test different ideas and technologies for breaking through the noise and building loyal online audiences. Print service providers that can help execute wildly creative, technology-driven solutions can earn a premium. For example, if the “creative technologist” on your staff knows how printed electronics can make apparel or large-format graphics more functional, market that skill!
Graphics for More Events and Experiential Marketing: Even in this era of digital communications, real-life events continue to be effective marketing tools. Brands, retailers, publishers, and other organizations will conduct more events, so they can build strong relationships with their online audiences. Experiential marketers strive to stage events that are remarkable so that they generate lots of buzz on social media.
More On-Demand Manufacturing: Variable-data printed on mass-market products has helped make consumers aware that almost any type of printed product can be customized. Combined with a desire to minimize production waste, this broader awareness will generate even demand for customized products for home décor, apparel, and packaging. Digital-measuring and augmented reality technologies are making it easier for consumers to order custom-made apparel and décor products online.
To serve new types of enterprises, agencies, and customers, print service providers can become centers of research and innovation. You can partner with brands, retailers, and other creative agencies to execute complicated projects that combine print materials with electronic technologies for experiential marketing, brand storytelling, immersive hospitality, and experimental alternatives to conventional retail stores.
As shorter-run printing becomes the norm, you may start wondering whether you are a printing company that provides creative technology support or a creative solutions provider that also provides printing services.
These changes won’t happen overnight. But it’s important to consider how changes in consumer behavior and new technologies might affect the requirements of your printing customers.
The buzz in printing for the past few years has been differentiation. This trend will continue in 2018. Conventional and digital printers will see increased demand from their clients for differentiation in their print media. Faster turnarounds and reduced print volumes are additional factors that printers should look for.
Digital print will continue to grow in 2018 vis-à-vis conventional print, but the growth of digital is really not real growth. Rather, it involves the switch from producing a job on a convention platform to the same job on a digital platform. This is why printers still see higher page counts in conventional printing than in digital.
My key prediction is that in 2018 the digital and hybrid press manufacturers will begin to target brands and designers, educating them on how digital can provide print attributes unavailable with conventional print or even in conjunction with conventional printing. Marketing and education of this sort will prompt brands and their designers to develop print media and packaging addressing their target markets on a worldwide basis.
All print begins at design, yet the printing industry lags manufacturing industries such as automotive, electronics, furniture, and fashion in educating designers on what is now available in print. In other manufacturing markets, designs drive change; the printing market often strives to keep design out of the production process.
At Color-Logic, our motto is Brands Drive Demand. We believe that digital and hybrid press manufactures have the most to gain if designers can be educated and trained on how to use the benefits of digital. Thus we expect to see these manufacturers spend money to drive the market toward digital, versus waiting for it to evolve. The workflow connecting design to print is only going to increase, and those printers who get on board will gain new revenue opportunities. Others, with a wait-and-see attitude, will fall behind.
I spend most of my time on the large format digital printing market, which is still a growth market, but as such I hear more and more about the convergence of quick & commercial, large format, and other printing segments.
Evidence of this convergence is everywhere from channels, suppliers, events, and of course across the many companies that make up these segments. I believe this will continue in 2018.
Also, I expect we will see a lot of focus on the packaging sector as more companies seek opportunities in printing markets that are growing like large format, packaging, and decor.
Entry to new markets is challenging for many companies though – it is easy to say “we want to get into large format, or we want to do direct mail, or we want to get into packaging” but finding the customers, giving them a compelling reason to switch supplier/partners, and having the right capabilities to meet those requirements is a tall order. Just having digital print capabilities is not enough – it isn’t a magic bullet.
There is still a bias against digital printing in some areas within packaging and there are definitely established quality and price thresholds that large consumer packaged goods companies won’t step back from.
Companies can gather important understanding of customer requirements in segments like Packaging by acquiring companies that already serve their targeted growth markets.
1. 2018 will see a big interest in automotive packaging. OEMs are starting to compete with branded parts in aftermarket retail. The second annual Automotive Packaging Summit will take place next November to discuss this as well as production packaging.
2. Big data, packaging, and sales correlations. In 2018 we will see this number grow as more and more companies see the benefit of implementing data in their design processes. Package InSight is working on a fully automated software that will help companies design their packages based on the findings of 10 years of experience in the research field. Basically, there’s no reason to guess about your packaging design when you could have real data behind it at your fingertips.
3. Education is a constantly changing field, and with tuitions rising every year we are going to start seeing more and more certificate programs to supplement associates degrees. Students are beginning to see the value of a two year certificate program coupled with a robust apprenticeship or internship program -- and companies are seeing this benefit, too, by investing in their employees’ education. The Packaging School and other certificate based educational offerings will take the lead on this market in 2018.
Label & Narrow Web
The close of 2017 ended with some pretty noteworthy headlines. EFI and Xeikon announcing a partnership certainly got the label printing industry’s attention. EFI, a true pioneer in digital inkjet label printing technology, is putting its press customers into the hands of Flint Group-owned Xeikon. The EFI Jetrion product line now joins the vast Xeikon digital label press portfolio, which already includes the new inkjet-powered Xeikon PX3000.
The announcement was significant for a number of reasons, and I think it sets the tone for some of the activities we’ll see in 2018. Make no mistake, inkjet is trending upward, with increased speeds and improved quality causing converters that are looking to move into digital to reconsider their options. Once upon a time and not too long ago, you could count on one hand the number of production class digital label press vendors. Today, you’ll need several hands, because OEMs like Domino, Durst and Epson – to name a few – are making serious inroads, and I believe we’ll see inkjet and inkjet-based hybrid presses continue to challenge the EP leaders like HP and Xeikon for market share.
However, there is a big “but.” The EFI/Xeikon news essentially signifies EFI basically “throwing in the towel” within the now competitive inkjet label press arena. And I predict there will be others to follow. Not necessarily inkjet presses, but label presses in general. There is simply too much competition for every vendor to succeed, and new players are entering the market yearly. I’m predicting in 2018 perhaps discontinued press lines, and companies shifting gears to where they see more potential for success, much like how EFI views wide format and textile printing.
The M&A trend will continue in 2018, on both the converter and supplier sides of the business. This will be driven by the desire to enter growth markets such as flexible packaging. The year 2017 closed with the announcement of Fort Dearborn acquiring NCL Specialties. This was not just another acquisition for one of the largest label companies in the US. The move marks Fort Dearborn’s initial entry into the flexible packaging space. There will be more moves like this to come, from both the biggest players as well as small to mid-sized companies.
Printing revenues will increase to US$ 199.5B (+3%). U.S. real GDP for 2018 is forecast here at US$ 20.173T (2018) up 5.1% nominally; 2.9% in “real” or constant dollars when accounting for 2.2% inflation. These are in line with Federal Reserve Bank and Congressional Budget Office (CBO) expectations.
U.S. Federal and State government growth is forecast at 4.7%, which will surpass 35% of US GDP. Rising debt service (+1.8%) on cumulative public debt to more than 100% of GDP will constrain most private sector expansion by 6.1%.
Print will benefit from more promotional spending to saturate existing markets among the food/beverage and banking/investment sectors in particular. The market-by-market breakouts will appear in the January edition of Printing Impressions magazine, as well as for subscribers to Hot Markets.
How Might Your Business Change In 2018? Just look at how companies like Amazon have changed the retail marketplace. With Amazon Prime, consumers now expect same-day delivery even if they live in a smaller city, and certainly one- or two-day delivery even in the hinterlands.
This change in expectations at the retail level is sure to have implications for manufacturers such as printers. Print delivery expectations of customers will become compressed, and printers will be forced to respond. Digital printers, in all likelihood will be in a better place to respond, but even many of them will need to tighten up internal processes.
Perhaps the most important aspect of this is that printers who have close relationships with graphic designers will be in the best position. Too often, artwork and files coming to the printer must be checked and reworked--a time-consuming process that often requires back-and-forth communications with the client or the designer.
Being able to change jobs on a press in just a few minutes will not help a job that is stranded in prepress waiting for a designer or client to return a call. The entire process must be smooth and effortless.
Think about the fact that the Amazon process is smooth from the 'enter order' click until the package is on your doorstep. And strive to get as close to that as possible.
Winbound - Digital Marketing
We power the digital marketing of companies in the printing and print-related industries, relying on the experts listed above to steer the strategic directions while we keep them informed on the latest developments in digital marketing, such as content marketing, SEO, social media and email.
I’ll give you my predictions in relation to how businesses will approach their marketing in 2018.
I’m seeing a lot of businesses that relied strictly on salespeople begin to experiment with digital marketing. Those that have been active in digital marketing are realizing that they need to integrate salespeople into the process as well.
Perhaps it’s a realization that there is no silver bullet with marketing, that your tactics need to be unified across different touchpoints for maximum effectiveness.
The winners will be those who decide to stop clinging to the old model of relying strictly on their sales force, as well as those digital pioneers who realize they need that sales force to provide personalized expertise.
Print industry business leaders who embrace three simple principles will enjoy transformative success in 2018:1. Applied knowledge is no longer optional.
Smart leaders constantly look for new information that can help them grow their businesses. Whether it’s attending a conference, reading articles, or listening to a podcast (I know a couple of good ones), you must take an active role in learning more about your industry and how to run your business
Believing you know all you need to know is the first step toward becoming obsolete and even liquidation.
The implementation of new ideas is equally important, as your goal should not be to become a professional student. Applying the knowledge you learn is when the magic happens.
Acting on one or two new ideas can have a huge impact on your business.2. Delegation is a super power.
As a business grows, it’s not uncommon for a leader to perform too many tasks. Sometimes it’s work you enjoy. But a failure to delegate keeps you from focusing on your big picture goals, which soon become more like dreams.
Review how you spend your time. If there are tasks where your talent and experience does not make a significant difference, then delegate the duty to someone else.
The act of delegation may provide an employee with a new sense of engagement and can lead to professional growth.
Hoarding, time-consuming, low-impact tasks will stall your company’s potential.3. Run a disaster scenario for your business.
What would happen if your company suddenly lost your top client or your most talented employee? If you think about these things ahead of time, then you can minimize their disruption.
Life throws curveballs at even the best businesses. Minimize bad news through strategic planning.
Champion of Print
Profitable Print Relationships
- The split between printing companies that sell commodity print and printing companies that sell value-added solutions will continue to widen. The commodity print segment will continue to show great opportunities for the right companies. Whichever route printing companies choose, some will do things right and flourish. Unfortunately, others will struggle to provide what their customers are looking for and therefore struggle to stay profitable.
- Those printing companies that choose the value-added solutions route will increasingly move into including data management in their offering. The value of what is offered will move away from print into ancillary services.
- More printing companies will realise the need to engage and communicate correctly with today's online buyers. Websites will need to develop more ways of engaging and communicating immediately with their visitors. Printing companies will require online and customer engagement champions.
- The trade print segment will continue to grow. There are huge opportunities here for the right printing companies. But only those with the most efficient workflows and production methods will be able to make good profit margins.
- Wide format/grand format will continue to be adopted by mainstream commercial printing companies. The days of it being a specialist niche requiring specialist skills and companies are over.
- There will be more openness in the printing industry as people realise the value of working co-operatively, sharing information and learning from their peers.
- Many printing companies will continue to invest in machinery and then wonder how they will fill their new capacity.
- Rock LaManna will continue to broker successful deals within the printing industry. As he continues with his rock-star, global domination, his speaking events will become sell-out occasions, with tickets exchanging hands for many times the original face value!
2017 has validated our predictions that innovation, expansion, and an exceptional technical staff would thrive in 2017. 2018 promises to continue this trend! There will always be greater demands for lower cost manufactured products, but the ability to high speed convert a product has never been easier. New emerging control systems and high performance motor technologies will provide the most accurate, precise and repeatable manufacturing systems to date.
These innovative advancements in machine performance will continue to open doors for the development of new medical, pharmaceutical, electronic and label products as well as improved manufacturing of existing products. Coating, converting, packaging and sorting are no longer separate steps. In 2017, our customers benefited from fully integrated lines and we anticipate this trend to escalate with advancements in resourceful engineering and the embracing of smart technology.
Thanks to all of our contributors for their amazing predictions! Want to revisit our 2017 Predictions and see how we did?
Do you have a prediction to add? Feel free to leave it in the comment section below!