As the US continues to feel the effects of the COVID-19 shutdown, there are signs that the economy is beginning to embark on a path to recovery. The economic indicators below offer signs of hope as larger swaths of the economy continue to open, but all of them may be off course if there is a second wave of infections and deaths leading to additional stalemates.
- The latest unemployment rate from the Bureau of Labor Statistics is 13.3%, well below expectations.
- Prices for commodities such as oil and copper have rallied significantly, which typically signals global growth.
- Regional Federal Reserve production polls for New York, Philadelphia and Kansas City show growing optimism.
- Retail sales in the US were up nearly 18% from the previous month in May.
- Personal consumption – how much Americans spent on goods and services – rose a record 8.2% in May.
- Consumer sentiment rose 8% in June, which is important as consumer spending is the anchor of our economy.
While indicators tell a more positive economic story, the staggered reopening of businesses and local economies may hamper the return of production volumes for some print providers. While you cannot predict exactly what a recovery will look like in the future, preparing your company for what lies ahead is always a good strategy.
A recently published NAPCO research report, The top 10 trends that will affect profitability in 2020provides essential trends and strategies to help Print Service Providers (PSPs) increase profitability through 2021 and beyond. Four key trends from this report are highlighted below. Click here to download the full report.
1. Innovations in digital printing technology open up new possibilities
Results of a recent NAPCO research study “Added value for digital printing, ”Indicate that 55% of brand owners / marketers prefer to work with PSPs that offer print enhancement or special effects options, while 55% chose their PSPs for their ability to provide unique ideas for improving printing. These survey results show that the demand is there, and while the majority of print providers offer digital printing, less than half of these companies (46%) said they had enhanced digital printing with special effects.
Offering these enhancements not only provides a competitive advantage in terms of delivering a product that the majority don’t, but it also gives PSPs the ability to charge a premium for those products. Most print vendors said they could ask for anywhere from 20% to 40% more, depending on the type of improvement they offered. With correct pricing, this can of course lead to a significant increase in profitability.
Of those who do not offer these improvements, nearly two-thirds (63%) cited lack of customer demand as the reason for not providing these services. While this may seem contrary to the demand shown above, it is likely that many customers do not know and need to be informed about the value and availability of these enhancements. This is directly related to our next action that may increase profitability in the near future.
2. Customer education is a key differentiator for businesses as customers look for salespeople who can offer them insights that they cannot find on their own
When interviewing brand owners / marketers NAPCO’s Added value for digital printing The study was asked about the characteristics they were looking for when selecting The printing preference was clearly to work with companies who were proactive and let them know of new ideas that could improve their printed matter (Figure 1). This realization shows that it is important to have a continuous dialogue with customers and to understand the goals they want to achieve with print.
Print is such a broad and complex industry that it is difficult to keep up with the latest information, technology and trends. PRINT the United Alliance iLearning Center is a great resource with a ton of educational resources provided by industry experts to help.
3. Operational efficiency is an essential part of profitability
When you’re evaluating your business in a bubble, it’s hard to know if you’re working as efficiently as possible. Because of this, it is important to compare your business with other similar companies in the industry. Profit leaders have significant profit advantages over the average printer (6-8% higher). Therefore, it is helpful to compare your top performance metrics with those in an attempt to close the profit gap. Inefficiencies can be identified by comparing operational, employee, liquidity, and balance sheet metrics that make anything possible PRINT United Alliance performance metrics. For more information about the program, including prices, see performanceratios.com
4. Finding creative ways to attract people is critical to profitable growth – today and beyond
As the recovery continues, you will most likely have to fill vacancies that were lost during the pandemic or simply add more staff as your capacity increases or employees retire. It is often much more difficult to find qualified and experienced employees than it seems. In a recently published NAPCO research studyRecruiting and retaining talent for workforce45% of PSPs said they found it difficult to fill some or all of the positions while in another study of manpower54% of respondents said the biggest challenge their company faces is finding new salespeople. According to the study, the most widely used and effective method for recruiting production workers came from employee referrals. While this old school method can be effective at finding new employees, it is not always available. It is important to build a wider network and use newer methods such as online job sites, personal networks, classifieds, social networks, internships, and others to hire and recruit employees. If you’re a company looking to bring in young talent, an internship program may be one of your best avenues and it gives you a chance to evaluate applicants before hiring them.
Although COVID-19 has cooled a hot job market, the printing industry’s ongoing recruitment challenges will return with the recovery. Human resources in the industry are a key challenge, and our research reports mentioned earlier provide good examples of what companies are doing to attract the kind of workers who will be beneficial in the years to come.
Analyst Insights provides research and analyst insights from the research teams of NAPCO and PRINTING United Alliance. Market research is valuable for making strategic business decisions, solving challenges, and seizing opportunities. NAPCO Media’s research teams investigate, analyze, and monitor critical trends in marketing, printing, packaging, nonprofits, promotional products, and retail. To learn more about how the team can use their research and industry experts to support your organizations, contact email@example.com.