Offset Printing Trends

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A recent Caslon survey shows offset run lengths are stabilizing. The graphs below show results from two segments: Commercial Printers with more than 10 employees and Quick/Small Commercial Printers. In each case the majority of respondents indicated that offset run lengths are not changing and in each case the number of respondents who reported increasing offset run lengths exceeded the number of respondents reporting declining run lengths.

Note – this data is from mid and small size offset print shops.  It does not reflect what is happening with the large magazine publishers as they are seeing significant declines in print volumes.

offset run lengths commercialoffset run lengths quick

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How will printers grow their businesses?

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In 2016 production print service providers had a good year. In our recent Caslon survey, more printers reported increases in annual revenues than declines by at least a 2 to 1 ratio.

As such, they bought more color digital print engines and produced more color digital pages than ever before.

Each year Caslon surveys the printing market either in North America or W. Europe.  This year in North America we surveyed printers in seven segments and in this article we are sharing some of the results for two of the seven segments.

Caslon’s survey of commercial printers with >10 employees shows that approximately 70% of the companies grew their revenue in 2016 and 85% expect to grow revenues in 2017This is consistent with an analysis of Printing Impressions data that was published earlier this year.

Com Print Rev Growth

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Digital Publishing – A New Revenue Opportunity

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Most publishers have seen a steady decline in print volumes of their publications due to a shift towards delivery via various digital and online channels. This in turn has led to declining revenue streams for publication printers. The old saying “If you can’t beat them, join them” now applies to publication printers who are adding digital publishing solutions to their offerings. New digital publishing solutions enable printers and marketing service providers to offer a complete publishing solution, add new revenues, differentiate and become more “sticky” with customers.

The first digital publishing solution was the PDF. Still quite popular today due to simplicity and low costs, PDFs are used by companies to provide electronic versions of magazines, newsletters, sales collateral, spec sheets, etc.  While reading a PDF on a PC is viable; reading PDFs on tablets and smartphones often is cumbersome as the content is not formatted for the device. Nor is it easy to augment a PDF with video.

Digital publishing

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Should You be Considering RICOH TotalFlow Prep?

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by Greg Cholmondeley, Workflow Practice Director, Caslon & Company


TotalFlow PrepI recently did a PODi Product Briefing on Ricoh’s TotalFlow Prep and was very impressed. Ricoh’s developers have done an incredible job at bringing their solution’s capabilities up to and, perhaps exceeding, other make-ready solutions on the market. The user interface is well organized and provides pretty much all the make-ready tools that most general commercial printer prepress departments need. It also seamlessly links into Ultimate ImpoStrip and allows operators to save automation templates for often-performed tasks or job types. I’ve looked at earlier versions of this solution and, as I say in the videos, comparing this release to those is like comparing Windows 10 to DOS.

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Retail value of color digital printing grows again

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The retail value of digital pages was up 3% in 2016 to $34.7 billion. The increase was driven by color page volumes, which were up by 15%, however, just like in 2015, most of the increase in print volume was from transactional and direct mail inkjet pages, which have a lower price per page than the pages produced in prior years. And finally the growth in value of color pages was partially offset by a 1% decline in the value of monochrome pages and some price pressure. The chart shows 78% of the retail value is coming from color pages.

retail value  2016

Direct Mail is now the most valuable digital, followed by sales collaterals. Revenue from color transactional print and books are also growing more quickly as digital color adoption via high speed continuous form inkjet presses occurs.

The retail value is represents the revenue derived by print service providers when they sell their printed output. Since 2004 the retail value of color digital printing has increased each year and remains a bright spot in the overall printing market.

 

VDP Software Adoption Rates are High

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Caslon has surveyed the marketplace to learn about adoption rates of VDP software for direct mail. Except for the In-Plant segment, adoption rates in North America can’t get much higher. Most of the larger companies have multiple VDP software packages.

The data from the survey is sorted by 4 segments in the production digital printing market: Commercial printers with more than 10 employees, Quick/Small Commercial printers, Digital Printers, and In-Plants. In our research we find that the profile of Quick printers and Commercial printers with 10 or less employees is very similar, so we group them together into one segment. Companies that we call Digital Printers are companies that focus on creating business based on digital printing technology and they generally have little or no offset capabilities in house. The often provide solutions, especially marketing solutions.

VDP adoption

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Direct Mail Volume Up in 2016

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USPS data shows that the volume of Standard A mail rose by 2.3% in 2016 vs 2015.  Volumes rose from 79.4 billion to 81.2 billion pieces. This compares to no change from 2015 to 2016. (Note this is data for the calendar year and not the USPS fiscal year).

Each year Target Marketing does a survey of marketers and they ask how marketers plan to increase, decrease, or keep consistent their spending on long list of marketing methods. It’s interesting to note that will regard to direct mail, more marketers are planning on increasing spending in 2017 vs 2016 (31% vs 25%) but also more marketers are decreasing spending on direct mail (9% vs 6%).  The net is that 3% more marketers are planning on increasing spending on DM, which should bode well for 2017 (that’s assuming the change in spending is comparable in either direction.)

The survey also notes that direct mail spending is 15% of the marketing acquisition budget and 14% of the retention budget. Spending on direct mail is exceeded only by email which has the largest share of both budgets at 25% and 46% respectively.

Direct mail remains an integral part of many marketing campaigns. Recently with the adoption of high speed color inkjet presses marketers are now able to produce campaigns with variable color images and the anecdotal evidence is that response rates are up, driving more revenue for both the marketer and the service provider.  Expect to see greater adoption of personalized direct mail as these new presses get installed throughout the industry.

For anyone interested in learning more about personalized direct mail they can join PODi, which has over 300 case studies on successful examples of personalized direct mail campaigns.

Remember to tell your friends and family to keep opening their mail and buy something.

Trevecca Nazarene University In-plant Pulls Off Major Turnaround with Xerox and EFI

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by Greg Cholmondeley, Workflow Practice Director, Caslon & Company


TreveccaI recently interviewed Kelly Huebscher, who runs print services at Trevecca Nazarene University, for a PODi Video Case Study. Trevecca University is a liberal arts school in Nashville, Tennessee with about 3,000 students. It is best known for their teaching and music programs, but my interest is in their in-plant printing operation. Their print shop went from an offset shop at risk of being closed to an organization which manages the fleet of 55 to 60 printers across campus with a central digital print shop. Their shop has a Xerox Color 1000i digital press driven by EFI’s Digital Storefront and Fiery Command Workstation.

I love hearing turnaround stories like this. PODi members can download the full, six-video case study from the PODi website, but here’s an excerpt from our interview.

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Workflow Automation in a Job Shop Produces Unexpected Benefits

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In PODi’s webinar, Workflow Automation – What Every Printer Needs to Know, sponsored by Xerox, Chris Bradshaw, GM of the AlphaGraphics franchise in Layton, Utah, took us through his journey to put workflow automation into his shop. You can watch a recording of the webinar by clicking on the webinar link

What makes Chris’ story so interesting to me is that he has successfully applied workflow software (Xerox FreeFlow Core) to his job shop environment. I often hear about the large volume shops applying workflow software and it works because they run a large number of jobs or have a large number of repeat jobs, making the ROI easy to justify.

But smaller volume shops often have an issue with the ROI calculation. And Chris will admit it took a lot of persuading and persistence to get the owner of the shop to invest.  What is interesting is that in addition to time savings per job (which Chris values at $5 per job) there was another round of benefits that were hard to quantify initially. Had he known the investment would have been a quick “no-brainer” for the owner.

Turns out that implementing automation reduced a large number of human touch points, which in turn eliminated a good percentage of the errors that they were dealing with on a daily basis. The brunt of these errors was handled by the CSR staff.  What Chris found out (through attrition) was that as the errors went away he could reduce his CSR staff by 2.  This savings was on top of the $5 per job savings mentioned earlier.

workflow

Another benefit that was a nice surprise was they can turn jobs faster, which is great for situations where the customer is in a big rush. This allows AlphaGraphics to provide improved service levels and offers a chance to secure additional margin on rush jobs.

Another tip from Chris is to make sure you have a solid champion for the new processes. Chris did note that implementing the changes to the workflow was harder than he thought it would be. Originally he thought that everyone would quickly see the value in the new way, but what he learned is that his team didn’t like change and change is scary. So he had to insist that everyone (no exceptions) use the new workflows and then overtime his team has come around.

Successfully Implementing Workflow Automation in a Job Shop

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When it comes to justifying workflow automation, especially in small to mid-size print shops, getting a good fix on the ROI can be elusive. That’s because labor savings on each job might not translate to immediate dollar savings. And the added benefits of fewer errors has compounding benefits downstream, from the bindery through to customer service, that are often hard to calculate in advance.

Even if you can get the funds to buy the necessary software, you aren’t guaranteed success. That’s because change is hard. “This is the way we’ve always done it around here” is a line often heard in shops everywhere. The resistance to change can be a huge barrier to implementing workflow improvements. It can be really frustrating for the person who can see the end benefit of change way before the other team members. “Why doesn’t everyone see the benefit?” can be expressed. It often takes persuasion and persistence to implement the desired changes.

Case in point: Chris Bradshaw’s story of implementing Xerox FreeFlow Core in the AlphaGraphics shop in Layton, Utah.  AlphaGraphics Layton UT  Chris joined the franchise about 18 months ago as General Manager, working directly for the owner. Chris’ tenured background included production experience and IT experience, along with a passion for using technology to improve business results. Even before his first day on the job Chris knew he wanted to add automation to the shop, but it wasn’t as easy as he thought it would be. It turned out that implementing the technology was the easy part. Read the rest of this entry »