31 May 2015 Print Companies

Onlineprinters is at the heart of a print revolution

The market for online printing is in its infancy, with plenty of scope for growth in the coming years. And Onlineprinters is determined to stay at the forefront.

A company that 11 years ago probably knew all its customers by name, when most came from the town of Neustadt in southern Germany or thereabouts, now handles 2 billion pieces of print a year, has 400,000 customers from 30 European countries, but is still located in the same town in Franconia.

Today Neustadt an der Aisch is probably more famous for its carp museum, founded to recognise the pisciculture industry founded because a few centuries ago the local prince liked to eat fish pie, than its printer. But it is Onlineprinters that is putting the town on the map.

The company is one of the big four German internet based printers that have provided the challenge to Vistaprint’s attempts to sweep all before it. Quite why these printers should be based in Germany, even chief executive Walter Meyer is not sure.

Perhaps it plays to a cultural disposition towards process and order, because these have to be highly efficient businesses and well structured to cope with thousands of different orders a day shipped out to exacting deadlines. Perhaps it is more prosaically that Germany’s location in the centre of Europe has logistical benefits. Perhaps it is a willingness to invest and keep on investing.

This is what the Meyer family business did. In 2004, it opened Diedruckerei.de as a first toe into online printing to supplement orders for the then 30-strong business.

The online business took off, becoming an international business as Onlineprinters in 2008 and now 98% of a group revenue figure that the company keeps secret but is somewhere north of €50 million a year, comes through one of 14 web portals.

Investment has kept pace, lagging slightly behind demand because as Onlineprinters COO Dr Michael Fries puts it, there is nothing worse than investing too soon. In 2014 it nevertheless installed three new presses, each eight-unit Heidelberg XL106 perfectors. It took the number of B1 print units across its three factory units into three figures, the largest line up in Europe, amounting to 16 perfecting presses.

Onlineprinters has stuck with the B1 format believing it to be more flexible than a combination of formats, though it has a couple of legacy SM52s, and the very large format machines that others have.

The B1 format helps with standardisation, every machine is profiled to run to ISO 12647-2 and the company has PSO certification across the plant. The company can guarantee to produce a consistent product and the certificates are vital to give customers the confidence that it will print to these levels.

This degree of standardisation also helps with planning and scheduling, the great challenge for any online business, and it helps with finishing. The majority of print ordered online might be simple flyers, business cards or posters, but Onlineprinters is happy also to fold and stitch booklets or magazines. It also has three Indigos for really fast turnaround jobs and large format for signage, on plastic or fabric.

In April it extended its same day printing deadline to 10pm at night for next day delivery, making use of the Indigos, one of which is a B2 format Indigo 10000 and another runs inline to a CB Bourg booklet maker. The same area houses the Durst and HP large format printers that have expanded the product range into textiles. It produces envelopes and is now testing label products.

The business is continually developing and adding new products to the range, and as the growth in orders allows it, adding different stocks. The logistics of online printing normally dictates that customers are offered only a limited choice of substrates and weights.

Likewise it makes sense to limit production to standard formats, single-page flyers, business cards and posters that do not require complex finishing.

However, in order to grow, the company needs to offer a broader product range and more choice to more discerning buyers wanting more sophisticated products. There are currently 1,400 product choices, amounting to 10 million combinations of product and specification.

“These include products which five years ago would not have been considered suitable for online printing,” Fries says. “We are printing on Fedrigoni and Gmund papers because we think as well as standard products, it’s also important to have areas that offer more flexibility and variety.”

Product types are researched and then will be added to the home page every two weeks. Each is monitored for impact and popularity. This is a data driven game, more about e-commerce than ink on paper. Products which do not climb are either repriced, adjusted and brought back or tucked away.

The secret sauce to the business model is the workflow system that underpins everything for Onlineprinters. It has been developed in house, evolving over the decade to cope with a greater range of products and product types, delivery dates and pricing in a number of currencies. The company is easily capable of coping with 4,000 orders a day and can scale as it grows.

Incoming files are assigned to plates and presses according to paper type, format and run and by delivery date. The greater the number of jobs flowing, the easier this calculation becomes and some customers will receive their job earlier than expected.

Like an Amazon delivery that arrives a day early without paying a premium for the service, the customer is likely to be happy. Conversely, if a job arrives after the expected time, he is unlikely to return. In online printing there is plenty of choice.

“Customers now have high expectations of commerce,” Fries explains. “Five years ago the race was about securing volume, now it’s about providing the best e-commerce experience. As a business we need to be both a good printer able to produce in high volumes and we must also know about e-commerce and marketing to be relevant to our customers.

“We are in a service environment where people can change to someone else. Service is what people want and what they expect from us. They don’t care about the automated processes going on behind the interface. We are in the service business.”

It means that Onlineprinters wields a huge marketing budget, including sponsorship and television advertising in order to keep its name in front of potential customers.

The challenge is then to convert those that are directed to the website thanks to the SEO or else stumble upon it, into paying customers. It is then a matter of providing a positive customer experience in creating the job and encouraging the final click to send the job. The easier this is, the more likely the visitor to the site is to become a customer.

A large collection of quality certificates is displayed on the site to help reassure the prospect and mitigate the risk he is taking. It is no accident that business cards were the first printed product to take off.

Everyone knows what a business card is and its value is low enough to withstand a poor job. It is with subsequent orders, once a buyer has gained confidence, that he or see will entrust more complex jobs to the online service.

That customer is more likely to be a business than a private individual, the first users of online purchasing. Around 90% of customers are business customers, and around 10% or so are other printers.

Online printing is taking the place of the trade printer and Fries confirms that other German printers are placing their standard jobs online where even with a mark up, online is less expensive than tying up their own presses which can then be used for higher margin project-based work. Work to printers is shipped under white label conditions to preserve anonymity.

Even so online printing has wiped out a number of smaller printers across Germany as their customer base migrated to the online platforms. These are the printers that failed to realise how the systems were changing and became stuck in old business models.That trend has slowed, with the result that the different online printers are evolving in slightly different ways.

Fries explains: “Five years ago the competition was who could grow volume fastest with the most efficient production and by these means to convert customers from conventional to online printing. Now it’s persuading those people to buy more.

“Customers have come to have expectations of commerce in terms of service so that price is not the main criterion for a purchase. It’s the other factors that differentiate between companies. And that is about service across multiple channels, email, online chat, Facebook. And this has to be underpinned by process stability and very good control over the workflow,” he says.

Each sheet is printed with barcodes to identify the jobs on it and set up for the next steps in the process. Job tickets attached to work in progress give prominence to a day of the week, when the job has to be on its way to the customer. Where multiple sheets are need for a brochure for example, coloured plastic cones provide an instant visual sign of which are the urgent jobs.

Finishing is either on Muller Martini lines for the magazine and catalogue products or on its four Horizons for the shorter runs with an automated HT1000V trimmer as part of the line.

If the company decides it needs more, there is currently the space in the third factory to accommodate the additional equipment. Not for long however, Fries reckons that the third factory will be as full as the others within a year.

“We think we’re at 25-30% of what is possible for people buying print online,” says Fries. “The growth rates we have seen in the last few years we believe will continue for the foreseeable future.”

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Dr Michael Fries

Dr Michael Fries

Dr Michael Fries became CEO of Onlineprinters in July last year, joining the company with a background that includes engineering and a spell with CeWe. He is optimistic that the transition to online printing has only just begun. "We are only 25% of where we could be," he says.

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