The runaway train that is the online purchase of print is not slowing down. Far from it. What was once merely about business stationery or flyers, now covers the panoply of print and is moving print into previously untouched areas.
Since Brexit the UK market has been largely protected from incursion by the German giants, though the likes of Onlineprinters, through ownership of Solopress, and United Print though partnerships with UK producers, can be active. FlyerAlarm, the largest German online printer officially closed its UK operation on 15 February two years ago. Saxoprint had already done so. This leaves the UK commercial market dominated by Bluetree, Cimpress subsidiary Tradeprint, Where The Trade Buys and Solopress and their offshoot brands, while any number of local printers are offering the staple fare of flyers and business cards to an existing customer base and to casual buyers searching for lowest cost print.
Beneath the companies generating revenues in tens of millions of pounds come a vast array of smaller mostly digital only, businesses offering what has been the standard fare of online printers, fighting to compete on price. With SEO and the cost of Adwords increasing, finding customers is increasingly costly.
Alongside these are more specialist printers: Printed Easy has carved a place for online printing of labels, Flexpress for case bound books. Others specialise in greetings cards or the wedding market, matching invitations with banners, table settings and so on. And there are more. There are companies like Proper Goose producing gifts that are personalised through print and any number of printers that are producing work as a trade service to those with an online brand and store, Helloprint for example.
It is in short a Cambrian explosion of online life. If print can be described and bought online it will be and ever more sophisticated and valuable orders are being placed in this way. Nor is the trend slowing down. As buyers can confidence in the quality and service they get from buying online coupled with the convenience and improvements in online tools, the proportion of print specified and ordered online must increase.
The printers are continuing to evolve their offerings in order to reach new customers with larger budgets and to satisfy a desire for simple or even automated purchasing of print. Other services related to print are being introduced, design, storage and distribution for example, to increase the stickiness of that supplier to the customer.
This also protects against those sites that continue to push the lowest cost of print for those standard items of stationery, pop up banners and flyers which will always be needed.
There is no question that as with every other printer, the online businesses were hit hard during the Covid lockdowns. Most customers are themselves small businesses, many in hospitality or other sectors where face to face contact is at the core of the service, and found themselves stranded. So orders for print dropped off. In most cases revenue has returned to above or close to pre pandemic levels.
Bernd Zipper, who heads the online print consultancy Zipcon in Germany, reports that trading in the Christmas season last year was good following a couple of quiet years.
Companies used that period he says to upgrade their MIS and workflow technology, to revamp and redesign websites and to research the potential for more personalised printed products, perhaps to tap into the explosion of ecommerce purchasing and the unboxing experience. As with others across the industry, these companies suffered from paper supply restrictions, perhaps switching to grades that were available rather than as advertised. Now the rise in energy and other raw material costs is providing cause for concern, though price increases seem to be accepted.
The online print revolution has come through its stiffest test to date and is proving resilient. Print buyers that have tested the waters with simple products and found that it works will want to order more complex print in this way. Already those with direct links between printer and customer are using private web to print connections to place orders for their standard products. It works well for franchise businesses or charities where branches place orders for promotional material knowing that brand guidelines are being adhered to.
This is not new. Perhaps the challenge is coming from Artificial Intelligence systems, like ChatGPT. It is a topic that will be tackled at the tenth Online Print Symposium, run by Zipper’s organisation in Munich at the end of March. The keynote speaker opening the event is Robert Keane, CEO of Cimpress, who will certainly include this type of artificial intelligence technology and what it means for online printers along with key trends like sustainability.
Cimpress as the largest online print business in the world is at the forefront of changing trends and through its Vista arm, drove the online purchase of business cards and similar print items. Now the emphasis is shifting slightly. The competition in low cost print is intense and there is little customer loyalty. The answer for Cimpress is to evolve this part of the business into a company that offers design and marketing services to small businesses as well as print.
It is a transformation journey that has been underway for four years, says Keane, in the latest financial report. “We have established Vista’s North Star vision to become the expert design and marketing partner for small business and laid the groundwork to improve our design and service capabilities. We have reduced discount intensity, elevated our brand, and expanded our value proposition to higher value customers,” he says.
While the journey is still underway, much of the technology ground work has been laid and Keane himself is stepping back from the CEO role at Vista, placing Florian Baumgartner in the role. Keane remains CEO of Cimpress and its board chairman.
Before joining Cimpress in 2019, Baungartner had worked for Amazon in a number of roles and at Cimpress has been involved with recent acquisitions to boost Design & Service: DepositPhotos, VistaCreate and 99Designs by Vista.
These provide the resources that a small business might need to pull together a marketing campaign, via the stock photos, the editable templates and output that the company hopes will hook its current and future customers. To hedge its bets, Cimpress also has links and interfaces with the likes of Canva as the leading online design application. This is a space that taps into some innate desire to create personally satisfying printed products and reaches a demographic that lacks access to conventional design tools like Adobe Creative Suite, yet still wants to create designs. This is the foundation of the so-called creator economy, made up of micro businesses spawning print from Instagram, Etsy or Pinterest accounts. It is a development that will continue to grow in coming years, expanding from simple to more complex items, from print on paper to print on anything.
The shift may be discernible in the company’s results. For the second six months of the calendar year, Vista reports a 2% decline in revenues thanks to currency fluctuations masking a 2% growth on a constant currency basis. It grew its new customers, but produced fewer holiday cards and invitations where competition is fiercest, while promotional products, photo gifts and apparel produced significant growth. Face mask sales dropped as did revenue from Japan, resulting in the closure of that business.
The product areas that show growth have lower gross margins albeit at higher average order values and “generate some of our highest per customer lifetime values” the company says. Customer loyalty and repeat business is the aim for all online printers.
Vista is pretty much untouchable in terms of scale, the Amazon of online print (though this is not stopping others trying to compete). Its revenues alone are approaching $1.7 billion annually and it is the largest part of the Cimpress group. Print Brothers and the Print Group, the two European based businesses in the upload and print area delivered revenue of $447 million in the first half of the Cimpress financial year.
In the report, the company says that while it has been hit by currency fluctuations and this it is operating in “a business environment characterised by macroeconomic uncertainty, rising input costs and supply chain challenges, is more difficult for smaller and less profitable competitors than it is for our businesses in these segments”.
In short, might the squeeze make it difficult for others to invest or force them to drop out altogether? Not according to investments being made by the large German companies. Cewe is the pilot installation of for Heidelberg’s Plate to Unit robot plate handling system, likewise FlyerAlarm has been working with Koenig & Bauer on its version of a robot plate delivery and loading system. Onlineprinters has acquired a Spanish online print business this year as it expands its reach across Europe where it already has plants in the UK, Denmark and Poland as well as Germany.
This is enabling it to share expertise around the group. Solopress managing director Simon Cooper, who has a group role in technology procurement, says that the UK company can now offer casebound and thread sewn books, partly following investment in a ten-colour perfecting Speedmaster XL106 enabling it to produce longer print runs and multi-section work, partly through the finishing capability that exists in with RIB Bookbinders within the Onlineprinters group.
The UK company has also been expanding the product range through additional colours in foiling, installation of a laser die cutter for label production and digital spot varnish. While price remains important it is no longer the be all and the end all. Convenience is becoming the new king.
The Solopress door drop leaflet delivery service is a case in point. Buyers are able to book a distribution service for their promotional leaflets according to postcode and demographic group through the same website that they order print. They are already able to order these services directly with a distribution company and many will have done so, but the simplicity of the Solopress offering and the convenience factor means this has taken off. It is easier to manage distribution through Solopress than through the labyrinth of Royal Mail’s online systems. It equally demonstrates that online print is no longer about small runs: the minimum quantity for this service is 7,500, the average is many times more.
It works because the experience of ordering through Solopress is better than through Royal Mail. In turn this means that any printer wanting to operate a web to print portal needs to make the user experience as enjoyable as possible, something that will mean new designs and sites optimised for mobile engagement.
For example, the website for onlineprinters.de is very different to solopress.co.uk. The key is to tailor the interface to the expectations of the target audience and what they are used to.
That audience is also evolving. A younger generation of buyers is completely web savvy having no memory of a world before the internet. The world of marketing is changing equally fast with the result that social media influencers have become a key channel for brands to work with.
Influencers have also become a market in their own right, one that Precision Proco is targeting. It has long provided a service for photo product providers, printing photobooks at its plant in Dagenham where it can track and fulfil book-of-one orders.
It is leveraging that experience to offer a series of standard products which can be manufactured at scale because they share the same attributes of format, paper and so on, yet each production run in an amalgamation of many separate orders. It is an extension of ganging A4 leaflets on a larger sheet which online printers has based their pricing model on.
Chief executive Gary Peeling says: “We call this Smart Productisation. We allow the customer to have whatever they want and in most cases it is an A4 case bound book. We have a list of standard products where this applies. Instead of allowing all the variety that is possible we nudge customers towards the more standard products. It becomes a bigger order for us though comprised of many small batches, including an order for a single copy as part of a batch go 500 books for example.
“This is quite powerful in terms of unlocking opportunities for using print. Instead of paying £30-40 for a single copy, the unit cost becomes £12, enabling someone to order a very short run for a pitch or presentation as well as for a photo book or travel memoir.
“We produce a lot of self adhesive photo tiles at low cost as a consumer product, but the specification is the same as office signage. It is a Smart Productisation approach.”
The company’s Where The Trade Buys arm is both taking advantage of this approach and also of the growth in outsourcing brought about by businesses that are reducing their own print production capacity. “They are accessing this through a digital platform that has a human involvement behind it. In our case customers can have what they want and this means moving into more sophisticated products like direct mail and so on,” says Peeling.
“We are seeing a growth in these areas because print is again becoming attractive because of the rising cost for businesses of acquiring new customers through digital means.”
The impact of legislation like GDPR has restricted broad brush digital campaigns which are also losing effectiveness through digital overload. Meanwhile the cost of Adwords is rising steeply. “It means that even with increases in cost, print is looking more and more attractive as a way to acquire customers. Digital marketing used to be low cost,” he says. “No more. Even Facebook is expensive and less effective.”
Social media though is considered a source of print for the company. It was been watching the expansion of the creator economy, the rise of influencers with hundreds of thousands of followers and sees an opportunity. A cook that has built a following on say TikTok has an audience for a book with their recipes in it. This can be ordered through the social media site and produced, print on demand, by Precision Proco. “It might be photographers producing a book or one-off prints for sale or perhaps wanting a small number to sell at a craft fair. That hasn’t previously been viable. This way the originator knows the cost of the book, knows how much it is sold for and so how much margin they make. There are no costs for stock so they are not exposing themselves in terms of risk.”
There is also the opportunity for additional branded merchandise, aprons or apparel for the cook perhaps, images on coasters or fridge magnets for the photographer. These can be supplied back to the originator of through drop shipping directly to the fan making the purchase. It is a vast largely untapped market to date says Peeling. “We think the creator economy is around $100 billion and that it will grow tenfold in the nest three or four years. We can help influencers to create quality products quickly and easily.”
The largest UK online printer is the Bluetree Group with sales that are fast approaching £100 million. This is not all print. Its decision to switch plans for its second factory from an apparel printing operation to production of face masks early in the pandemic has paid off handsomely and Bluetree Medical is a business of £43 million turnover in the year to April 2022. This leaves £50 million from print, both its online trade printing and direct to consumer or small business Instantprint portal. Both print and medical products contributed equally to the 76% increase in sales.
Print sales have returned to pre Covid levels says Phil Tasker who joined as head of Route1 Print three months ago with a remit to sharpen the business up. He says: “We are not necessarily seeing a huge shift in the nature of our work: there is no big new product range on the horizon. It has been adjusting to the new normal over the three months I have been here. It’s making sure we are well positioned for the next phase of growth.
“We are trying to be more agile, more flexible in what are still extremely turbulent market. It means us being more focused in delivery what we can for customers because of the difficulty in getting materials, though that is now settling down.”
That said demand for booklets, stitched and perfect bound products continues to grow and the company is getting to grips with the capability of its Landa S10P, the first example of the perfecting press in the world at the time. “That has been a steep learning curve for us and we are beyond that into full production with improved quality. We are putting a lot of production work through the Landa and it gives us another production route for us because it can print on a huge range of stocks and offer personalisation. It suits short runs where there is normally a lot of job set ups and preparation work required. We can run those on the Landa, which makes it a bit of a game changer for us.”
There has been a move towards shorter print runs, and a rise in the number of transactions going through, yet the average order value per customer has not dropped
Tasker agrees that there has been a shift in the market, a growth of printers reducing their own capacity and turning to online trade printers to be their print room. The acquisition of Kingsbury Press feeds into this with perfect binding capacity and case binding knowledge and its unique K-Bind lay flat binding development. “We can offer our trade customers lay flat and thread sewn books, which is new from us.”
But while almost frictionless online ordering is what is needed for production efficiency, it does not mean that the internet does everything. “On the Route1 side we do not consider this to be a one size fits all approach. We appreciate the importance of face to face contact with customers and wanting to spend more time with them in their business and to understand this.
“We want to talk to those printers that have reduced their production capacity and to use us so they can focus on developing their customers. We recognise that as the industry changes this kind of business will be more commonplace which is what it is important that we really support them and make sure that we deliver for them in lots of different ways.”
One of those ways is through sustainability. The scaffolding is in place around Bluetree’s factory for the installation of an array of solar panels to generate at least some of the energy the plant requires. The group’s carbon usage is being assessed by Achilles and the figures published in the group’s report and accounts. It is just the start of the journey, and one that is recognised as essential, as much as for recruitment as for customers. When interviewing for graduate roles it is clear that the prospects do not want to work for a business that is not sustainable.
The employees are a key part of the equation for Helloprint, the Dutch company that works through a network of print partners. It is applying to be recognised as a BCorps company, led by the appointment of Isabelle de Wolf as sustainability manager. “We already had sustainability ambitions,” she says. “The decision to join BCorps has accelerated this impulse.” There has also been pressure to offer products with reduced eco impact from customers. “We have definitely noticed that customers are asking for more eco alternatives to the standard products.”
There will be greater prominence for more sustainable options on the portal and help to take the message to the print partners. Some have already started the journey, even to the point of having on site power generation, carbon reduction policies and so on. Others have not. “We want to understand and to have that conversation with the printers. Some small printers have sustainability flowing through their veins, others not so much.
“We need the capacity and knowledge to help them along the way and so make a big impact,” says de Wolf.
The process of setting goals for sustainability is underway. Likewise the process of creating the content and the choices for customers. “They need the information to make well informed decisions when they shop,” she says.
They also need the choice and increasingly a greater complexity of products. The challenge of meeting the shifting demands will continue the divide between companies that can meet these changing requirements and those that believe that web to print is about selling at the lowest possible price. That might have been the case a decade ago, but for the rest of this decade online purchasing of print is about delivering the best possible experience, using the most convenient technology yet devised for making informed decisions, and ensuring that print continues to have a huge role for new generations of consumers.
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