TOP US PRINTING INDUSTRY TRENDS AND INFLUENCERS

The presentation covered the key market, competitive, customer and technology trends, and their implications for the printing industry. It began with current findings from NAPCO Research surveys and the PRINTING United Alliance State of the Industry (SOI) Research (sponsored by Canon USA). The SOI research is based on a panel of more than 600 print providers across industry segments that agree to participate in quarterly surveys.

The SOI research is based on a panel of more than 600 print providers

The 165 print providers participating in the SOI second quarter 2024 survey, reported challenges to profitability in the first half of the year. Sales grew 0.9%, while operating cost inflation increased 5.2%, outpacing price increases of 3.8%. As a result, real (inflation-adjusted) sales declined 2.9%. 

SOI panel members identified three main factors having the greatest influence on their businesses. Firstly, the macro economy, including interest rates and inflation (70.6%). Secondly, availability and cost of personnel (61.2%). Thirdly, investments to increase productivity, automation and production speeds (54.4%).

Close to 68% reported diversifying beyond their primary print segment

Despite a challenging business climate, 84% of SOI panel participants plan to make a capital investment over the next 12–18 months. Respondents’ top investment objectives include increasing productivity/efficiency (88.1%), replacing/upgrading equipment/software (64.3%) and automating operations (57.1%).

The presentation also elaborated on the significant, over-arching trends that are reshaping the industry, powering competitive advantage and supporting profitability. Four critical trends were discussed as follows.

Market segment convergence – print providers expanding into adjacent market segments – will continue as organisations pursue new offerings to grow and diversify their businesses. Close to 68% of all SOI panel members reported diversifying beyond their primary print segment. Table 1 offers a quantitative view of print-market segment migration trends by type of provider. Entries highlighted in yellow show key secondary segments print providers are moving into. 

Artificial intelligence (AI) is poised to be the next big printing-industry disruptor and its adoption has begun. NAPCO Research and the PRINTING United Alliance launched a new research study – Artificial Intelligence in the Printing Industry: The Journey Begins.

The research finds that while print providers are primarily using AI today for content creation, they expect to expand its use into operations, sales, customer service, market analytics, HR, risk management and cyber security.

The research study – part of an ongoing series to track AI industry adoption and use – indicates that print providers are adding AI applications into their operations. Comparison of two separate surveys, conducted during different time periods (see Figure 1), shows SOI participants using AI have increased to 40% in March 2024, from 23.4% in September 2023. 

Process automation is vital to the success of print-service providers. According to NAPCO Research’s 2024 Commercial Print Trends and Strategy Service survey, 77% of print providers are automating workflows to overcome labour shortages and cost, workflow bottlenecks, and profitability management.

Process automation is vital to the success of print-service providers

The combination of innovations in digital-printing technology and customer demand for personalisation – as well as shorter runs and faster turnaround – continues to accelerate the analogue to digital-printing transition across key print-market segments. Figure 2 illustrates the digital to analogue transition across three key print segments, as reported by SOI panel members. The survey asked respondents about the percentage of work printed analogue and digital, over the last two years, and expectations to 2026.

The segment with the greatest movement to digital printing is wide format. There are many types of digital wide-format devices offering various points of entry for print providers looking to move into an adjacent print segment. The commercial print migration to digital is increasing as more choices in digital presses – format sizes, speeds and ink types – continue to expand the range of product possibilities and providers struggling to find offset press operators.

The segment with the greatest movement to digital printing is wide format

The apparel segment is beginning its transition to digital-print production due to innovations in direct-to-garment (DTG) printing and direct-to-film (DTF) technologies. As one SOI panel member noted, “Digital is the one thing that will change everything. No worries about potential chemical issues or regulations. It is faster, cleaner and now less expensive to go digital.” 

Another panel member commented, “The evolution that happened to ink-on-paper printing years ago is happening to apparel decoration. Quantities will go down, customisation will go up and the once-coveted speciality things, such as matching colours and hand feel, will go by the wayside so that the consumer can get it faster and with a smaller up-front investment.”

Digital printing is becoming more affordable, explained a panel respondent, but added, “It’s got a long way to go. We can buy five analogue machines for what we’d spend on a digital machine and get twice the output. Our analogue machines can be used 20 years later, while the digital machines lose their front-runner advantage after a year.”

Print providers making moves to maximise productivity company wide, move into adjacent markets, invest in technology and automate production processes, will be best positioned to alleviate profitability pressures. AI adoption is in the early stages and is poised to be the next big disruptor and tool for profitability and growth. 

The research report, Artificial Intelligence in the Printing Industry: The Journey Begins, is available, as a free download here

The PRINTING United Alliance’s SOI reports are free to members of the Alliance and are $199 for non-members. Copies can be obtained here