10 February 2020 Print Companies

Precision takes position for print’s digital future

Precision Printing Company is one of the UK’s leading online print groups and CEO Gary Peeling has his eyes on limitless opportunities as the world of print buying gains greater confidence in transacting through print portals. The story has only just begun.

It is a Monday morning in January. Inside Precision Printing’s spacious factory in Dagenham everything seems unhurried, meetings or calls are going on, machines are printing, cutting, folding and binding, as required. It is a complete contrast to the same factory a month earlier when the company was coping with a barely comprehensible 60,000 orders a day.

The period between Black Friday and Christmas Eve is Precision’s busy season with orders for personalised cards, calendars, books and photobooks vying with its more usual fare of flyers, brochures and other advertising material.

During that manic period it is all hands to the pumps. Packages are wrapped according to the manifest list for that job. These are dropped into postal bags for collection and delivery. The system is designed to cope. Each operator has a screen with incoming jobs and their urgency listed, each has a work sheet, colour coded to denote when the job needs to be out. A barcode matches the job in hand to the worksheet and relays progress to the central system.

This system has worked for almost ten years and it worked again in 2019 having been tweaked during the year, with the introduction of new work stations, to shave a few seconds off each action. In January these are being repurposed for the next flow of jobs.

During December, a three-week month, chief executive Gary Peeling points out that turnover for the few weeks was £3.2 million. “It was incredibly busy,” he says. Chief operating officer, Andy Skarpelis, can smile as the details fade. “It was what we would call stress testing,” he says.

It is a barely credible performance and would be impossible without being able to track every job and every piece of print at every stage in the process. Precision invented the way to do that, calling it Oneflow. And while Oneflow is no longer owned by the business, having been sold to HP, it remains essential to it.

There will be another peak in one-off jobs in the run up to Valentine’s Day, though nothing like Christmas when consumers head for websites to order personalised products which in turn send the orders for Precision to manufacture.

“There’s still growth in this, still at double digits and at a slower rate than in the past, but also from a higher number,” Peeling says. “Demand will only continue as consumers become more confident with the service levels promised by the providers. It’s fundamentally the same product mix, while we are seeing a greater emphasis on curation and design of these products.”

In short, there are some high quality brands with strong design ideals coming to the party. It is not just about uploading a photo and seeing your name in 24pt bold on a calendar any longer. “One of the brands we are dealing with is collaborating with different designers across lots of different sectors to come up with products that have a very sophisticated design, look and feel. It’s the progression from something with a name and picture into something that is intrinsically beautiful in its own right.” Instructions at the workstations within the dispatch area of the factory floor remind staff to wrap deliveries for this company in tissue paper before sending them out. It is all about the experience.

Precision’s goal is to make this work even more appealing. This underpins its decision to install the Scodix Ultra 101, the latest version of the digital enhancement press but with inline foiling. “Foil blocking is very popular in the social stationery space,” he says. “It was one of the drivers for investing in the digital foiling.”

The new machine replaces two original generation Scodix machines, one that Precision has owned for a long time, the other being one of a pair that RCS operated as CMYHub UK and was bought by Precision as part of that company’s acquisition last year. The new machine, the first to be supplied by Friedheim since taking the UK agency, will more than match the capacity of these two as well as offering the additional service and extra capacity.

“We hope it will run at four times the output speed of the original machine. And we could not do digital foil before. We have conventional foil blocking and could laminate and use the Scodix for enhancement, but not real foiling. Now we can offer run lengths of one with foil and it will be an exciting enhancement for resellers using Where The Trade Buys.”

This targets resellers and is another rapidly growing market, supplying trade customers with an ever expanding range of print products for onward sale to their clients. One of the most popular of these is a 450gsm business card which is laminated or UV varnished. “The new Scodix will reduce the cost of these enhancements so making the product affordable for longer runs,” Peeling says, “and there is the addition of foil as well, to enhance a business card.

“We are confident it will be very popular as well as providing enhancement for books, brochures and more.”

The Where The Trade Buys customer will be able to view a representation of the job via the web portal which is using a shimmer effect to make it clear to the user what it is they are looking at.”

There will be an appeal too to the bespoke customers that deal with Precision Printing for presentation packs, direct mail and so on. “This industrialises the process and provides exciting opportunities for printers and their clients,” says Peeling. Everything should be in place by the end of February.

The Scodix adds to the services Precision can offer just as a Mita offered more open flat binding capacity just ahead of the busy season at the end of last year.

An additional guillotine, on the other hand, added nothing to the services for customers but did eliminate a potential bottleneck. Precision now has five in a line, with no work in progress waiting from the presses. Sheets from the four Ricohs and four Indigos are assumed to be dry and are processed immediately. Those from the two RMGT 928 LED UV perfectors are known to be dry and can also be processed at once. With sufficient guillotining capacity there is no reason for any delay. And as work is frequently wanted for same day delivery, delays would be disastrous for the business.

The line up of print capacity is followed by an equally comprehensive range of finishing technology, folding, stitching, perfect binding and value added varnishing, foiling, laser cutting if required, case binding and of course digital enhancement. Large format print is located in Sunderland and promotional products in Reading.

With Drupa this year, it provides the opportunity for Peeling, Skarpelis and the teams to investigate the next technology steps. Peeling’s visage was highly visible at the show in 2012 and he was active too in 2016, though he is not expecting this profile to be repeated in 2020. What he will be looking at is the maturity of inkjet technologies.

Peeling explains: “Our strategy is to provide the most flexible platform for the professional reseller clients online. We believe today we can produce 8/10 of print projects online that most customers are likely to require. The investment in Scodix is part of closing that gap further. What’s interesting for our trade customers is that projects that contain enhancements and other degrees of complexity can attract a higher margin for them.”

Online printing is frequently linked to simple products, flyers and simple folded brochures, rather than complex products which have been difficult to specify online. As buyers become accustomed to making purchases online with simple products, they will be confident to move to more complex products. That is the next transition.

“Looking back to 2017, 17% of EU commercial print sales were purchased online, amounting to £12.6 billion. And by the end of 2020 it will be 42% by value,” says Peeling.

There is greater scope for growth in the UK which lacks the giant operations that exist in Germany, Italy and France. “Germany, for example, has four or five print providers with sales of more than €200 million. The UK is well short of that and if you were to put the largest online print providers together, their sales would still be only one third of the largest Germany provider. This shows the transition that still needs to take place in the UK.”

Precision has sales of £25 million, still well adrift of the £100 million that Peeling believes is possible. “We are growing at 20% a year over the last two years with upload and print growing at 80% a year,” says Peeling. When the company moved to the Dagenham factory from a multi-level building in Barking, it gained through the efficiencies of a single-level production floor. A deal to fund the move was put together with Compass Business Finance and has paid off handsomely. The company expected to have the space to cope with expansion for the following four years. Now, says Peeling, space might become an issue towards the end of this year.

“We don’t think that growth of online print in the UK will slow down for the foreseeable future and the transition is going to be extremely quick. We will see new entrants – after all it’s never too late to join a growing market. The cost of entry, however, is significant, both in development of the technology and now, in the increase in cost of acquisition of clients through online advertising. That cost is increasing each year which makes building a business for new entrants more challenging.”

To date Precision has been able to fund its own growth using usual borrowing channels and without recourse to selling equity in the business.

And there are no plans to change this, says Peeling, even to get to the £100 million turnover he believes is possible for the leading online printers in the UK, as this country follows the trends established in mainland Europe.

The price for simple products is highly competitive and even the German giants are feeling the pinch as others undercut them. “However, the key benefit we provide goes beyond price, particularly when the client is putting their business relationship with their customers at risk in the event of poor service. If the job doesn’t arrive on time, the end client is not going to be satisfied.

“Hence, at Where The Trade Buys we provide a service which is price competitive but which is also robust in terms of quality and delivery, and we will stand by the customer if it goes wrong. We like to treat our customers like rockstars, to reward loyalty.”

There is a line up of rockstars on the wall at the factory, the likes of Mick Jagger, David Bowie, Elvis Presley and more. None of them is known to have any association with print. There is an elegant fitted kitchen area for staff to make drinks or ping their lunch in the microwave. Soft magenta seating and a red phone box provide areas to relax.

The next step in the red carpet treatment comes with services that can look after aggravating problems. A fix a file service to sort artwork problems is now being rolled out. It will correct problems in files that fail a preflight process rather than return these to the customer.

“We are offering the ‘fix me’ service at a low cost,” Peeling explains. “It means our resellers can deal with problems in artwork submitted by their customers. We can produce PDFs from native files, we can add bleed and trim boxes from £10 a time. It is a fusion of automated workflows and human support in the background and the same type of support you would expect from an offline print provider, but which is very rare in the online space.”

Peeling believes that this is a service that is needed, explaining that if a reseller is out of the office when a customer problem like this pops up, he would perhaps not be able to deal with it until the next day, putting into jeopardy delivery schedules and the relationship with the client. “We aim to make these corrections within 90 minutes of receiving the request,” he says.

This will be followed within weeks by a second new product, this time to allow Where The Trade Buys customers to specify multiple delivery points from a single order, perhaps combining flyers with different quantities of brochures or posters to be shipped to separate locations. With most upload and print companies, the only way to do this currently is to create a different order per address. Precision’s software pulls all this together allowing greater flexibility despite dealing with an online supplier. “It’s about offering proper service online rather than imposing a Henry Ford approach.

“One of the advantages we have is that because we have come from a bespoke printing background, and still operate as a bespoke printer for the right clients working with teams of account managers, we understand what people are looking for.”

It is a way that Where The Trade Buys can differentiate itself from rivals. It is the same imperative to create a point of difference behind the investment in embellishment. “We are confident that customers are looking for a more complete service and we will be developing solutions for that. The A4 flyer is not the central product we provide,” he adds.

As the millennial generation populates all ranks of decision making in businesses, the drive to transact through technology will increase, and as trust is established with simple products, buyers will gain the confidence to search, specify and purchase via portals or apps.

Already for Precision, the more popular products include perfect bound books, case bound books and other multi section products. Last year Precision installed a Böwe 9G high speed inserting line and in May the company will introduce online ordering for direct mail products. “We will call this ‘snail mail’,” Peeling reveals. It is about making print as easy to manage as email. “We will be combining with four-colour printing for self mailers printed digitally and also inserting into envelopes.” It will be secure and compliant with GDPR and similar regulations.

Another development will come next month with Inky, an API that will integrate the Where The Trade Buys functionality into a customer’s own website, allowing them to add products that Precision will print to their own store, either to stand alone or to supplement their own products. Precision calls it a “Print factory as a service”, launching with more than 100 products available.

There is a link to access real time pricing, then orders submitted from the client’s site are automatically passed into Where The Trade Buys. Tracking information is returned in the opposite direction. The automation will cut out several minutes of processing for each order and will enable closer connectivity to third party suppliers.

This naturally leads into Inky website design tools to help customers make the best of the service on offer. This enables the reseller to select the products from the portfolio and apply his own mark ups, in short to create a website that it can transact with his customers who want to use an online platform to buy print.

Combined, it is a means of driving growth and shifting away from the lowest common denominator approach. That will inevitably lead to other products, packaging being an obvious extension. This shares the same trends as commercial print with shorter volumes, increasing customisation, shorter turnarounds and desire to purchase through online portals.

‘In the longer term we will explore labels and packaging; 3D printing is a different market, but which is very similar and there’s definitely an opportunity there to look at,” adds Peeling. “Online has to be the way for these long tail markets.”

There are other directions that are being examined. “Corporate print management is ripe for disruption though platform management,” Peeling says. “Currently, existing print management models are human based, and now even corporates are using print in lower volumes and the benefits that upload and print is bringing to others buying short runs, can also work for corporate customers, as well as for brands that have replaced the print buyer function.

“In a brand the print user can be waiting 24-48 hours to receive an estimate, compared to an online user who will get the estimate in two or three minutes.

“We are not there yet, many of the systems that are needed need to be developed. It needs to integrate to procurement, to allocate costs where needed. But there is no reason why this should not happen.”

He is also hopeful that the drive to sustainability and return on investment will increase demand for print.

His optimism is as boundless as it was in 2011 when Precision was just stepping into the online world. “Looking back the strategy was already in place: automation and flexibility to produce single copy products have turned out to be the cornerstones which have delivered for us going forwards.

“We are looking forward to a more vibrant market place in the 2020s. The concentration on sustainability will help the fact that print is offering better value than it has ever done in history, in terms of return in investment against cost.

“Costs are increasing daily for those choosing online and digital to spread their message, while something as simple as printing a flyer can be four times as effective in terms of ROI than pay per click through.

“And finally marketers will begin to realise this and recognise the value that can be delivered by print and so increase their connectivity to the offline space,” he says.

“Moreover, print clearly has a sustainability benefit compared to the energy hungry server farms and device batteries needed to support the digital infrastructure. That impact is beginning to be understood.”

Combine that realisation with the growth of online transactions and Precision finds itself in a good place, even if that place is Dagenham.

Gary Peeling is planning with Precision. The company has led the way in the online trade print sector and there is scope for further growth as more products are introduced and as new customer types turn to online purchasing tools.

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