15 June 2020 Business

Welcome to the print factory as a service

As printers review their future strategies in light of the Covid-19 pandemic, partnering via technology with a trade printer can deliver the capacity that is needed and can enable them to stay in business – even if they no longer print anything.

The lockdown caused the immediate cancellation of print jobs across the country. It was not the time to be a specialist in events or exhibitions. And it was not a time to be an online trade printer. Orders vanished like mist on a summer’s morning.

Large format display printers have been able to use capacity to produce personal protective equipment, especially face visors, for the health service, care homes and retailers that have been able to remain open. And they will pivot again as outdoor events and exhibitions begin to be permitted.

Online printers likewise shifted immediately into survival mode, putting staff into furlough and running skeletons shifts more in case of work coming in rather than the expectation than it would. Much of the workload is either events related, from weddings to exhibitions; seasonal from festivals to tourism or retail related. The short term did not look good.

But if a crisis accelerates existing trends, then online printers have been well positioned for the medium and longer term. Most have been innovative, adding antimicrobial coatings as an option as FlyerAlarm has done, back to business collections of floor stickers, flyers, posters and wash stands, or into production of face masks. These may be decorated attire for wearing on public transport or in shops. Or they can be medical grade items as offered now by Bluetree after a significant investment to meet what will be an ongoing need.

In the longer term, online printers are going to be the production arm of commercial printers up and down the country where the lockdown has prompted a complete rethink of how they operate as a business. Or indeed if they can continue to operate at all. The most pessimistic projections predict that 1,000 printers in the UK will be closed or merged by the end of the year.

The alternative, backed by the number of inquiries fielded by secondhand dealers, is that printers will reduce production capacity. If a printer sheds much of his litho capacity and instead directs this work to one of the online businesses, he can continue to service customers, can reduce overheads in terms of running a litho press, rent and staff, and continue to operate a digital press to provide an on the spot, same day print service either for local customers or for those placing work through a website. If the UK’s dealers have been dealing with calls from printers wanting to understand the value of their assets, those providing web to print software have been equally busy.

“The work seems to be coming back,” says Gary Peeling, chief executive of Where The Trade Buys. “At first it was like jumping off the cliff, and it’s from a low base, but sales in May were 200% up on April. From 78% down, we were only 50% down which is less than we thought it would be. Site visits are up and there are people looking in the shop, which is encouraging. We will see immediately when activity picks up just through the increase in transactions.”

This experience is replicated across the sector, an instant drop in orders followed by a slow recovery.

There has also been a switch in the products displayed prominently on the website. There is no point in promoting business cards when there are no business meetings where the exchange of cards would normally take place. Over the next year this is likely to change as those made redundant in this crisis start micro businesses from the kitchen table.

“What we would consider the stalwarts of the business, PUR books, stitched booklets or brochures have virtually disappeared,” says Peeling. “Print for the hospitality and events sector is just not needed at the moment. Floor stickers, which were in 105th place have become the most popular product. People need things to make their office safe. They need to be ready for a return to work.”

Many printers may never do so. As the job retention scheme unwinds it may be found to have been a redundancy delaying scheme. Certainly there are plenty of reports that print companies will look for mergers, bringing sales of two companies into a factory and production capacity run by one. Others have found that the skeleton staff has been able to produce only slightly less than a full crew managed. In both cases the new normal may be operating at a lower capacity and placing more work with production partners.

This is a trend that was already noticeable before the lockdown. Simon Cooper, chief executive of Solopress in Southend, says: “It’s very hard to predict what the landscape will look like on the other side of this crisis.

“The trend has been going on for the best part of a decade and goes a long way to explaining why the online printers that serve the trade (us included) have done quite well during that time. I’m not sure to what extent the current crisis will accelerate that situation. In many ways, businesses with older equipment that’s already paid off, will be able to survive for some time based on government support.

“I think we’ll only really start to see the impact of the crisis once we get back to ‘normal’, probably around the last quarter of this calendar year. If that trend does emerge, then obviously we are well placed to support those businesses as a production partner.”

It works where there can be close integration between the business that is shrinking its production capacity and the online service partner, through use of relevant online technology. The printer can select the sorts of products that the trade partner might offer and can combine these that will continue to be produced in-house. The end customer will see a greater range of products provided by their usual supplier.

Sarah Kilcoyne, head of sales and integration at Route 1, says: “As we come out of Covid-19, printers can (if they choose to) become a little more than just printers. They can become a lifeline in supporting other businesses as they come back to life. It’s not just marketing material that companies need, it’s health and safety signage, social distancing messaging like floor stickers or even physical dividers and face masks.

“All of this can be produced in the printing industry and we’re seeing lots of companies shift, add to or change their product range. This is something we’ve put a lot of energy into and we now offer a massively expanded range of products. The core of our business hasn’t changed however: litho, digital, inkjet and Landa print. We see ourselves as a perfect solution for someone that wants to have a large expansive product range without them having to have the kit or capacity to operate with economies of scale. All of this can be integrated into any front end or internal platform.

“We’ve had some early conversations started regarding this type of integration with a number of clients. We’re currently set up to integrate on a standard set of products on an agreed set of prices. The plan is to extend this to allow access to the whole of our web product range and prices.”

Anthony Rowell, business development manager at Tradeprinters, points to a different perspective. “We often get approached by businesses who are at the stage of reinvesting or considering whether they should invest in more litho or go to digital and use a trade printer to fulfil that part of their requirement,” he says.

These customers will receive a white label price to provide the margin over buyers that place work directly with the business. “We think we were the first trade printer to get the API model up and running and it has been very successful. We make almost all the core products available via the API, some like labels on a roll are more complex. Though if there is demand and volume, we can move that product up and make it available.

“At the moment we are getting several requests a day about the white label service and test kit we provide. It shows there are a lot of people interested.

Saxoprint's country manager Philip Foster says the German giant can already offer this and has been responding to these sorts of questions. Plans for a full API version has been put on hold, but, says Foster, Saxoprint can provide a price list of products that a printer with a VPress installation can add to their existing web to print set up. “We have tried to work with the larger print management companies to provide them with instant pricing tools, but it has required complex integrations through their IT operations. Whereas we can supply our price list through Coreprint and away it goes,” he says.

As the lockdown began, Where The Trade Buys was completing development of its Inky API integration software to enable this sort of integration. It was a project that was going to be put on hold to save cash. Peeling explains: “We were convinced that nobody would want to start an online business during a crisis, but the inquiry rate for this sort of service has gone through the roof and we are launching now.

“A lot of our customers it seems are looking at this model because they want to service their customers in a different way and want a digital platform to make that straightforward. This is the print factory as a service.”

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