When Visual Worlds Collide
Trends reveal themselves in wide-format printing, digital display, and 3D printing industries.
In my role with IDC, I cover three important markets: wide-format printing, digital displays, and 3D printing. Not long ago, I was at a 3D printing trade show in New York City. As I approached a stand where a printer was being demonstrated, I noticed that the booth was slathered in wide-format digitally printed graphics and also featured a digital display advertising the company and its products. For a moment, my three worlds collided.
IDC has just finished a study of the North American wide-format digital printing market wherein we forecast the retail value of print as well as the revenue opportunity for equipment, ink, and media manufacturers. To complete this forecast, we surveyed and interviewed manufacturers, dealers, wide-format graphics printers, and print buyers on a number of topics. What we found provides some views into how these markets and technologies come together– and how my worlds will be colliding much more often.
The retail value of wide-format digitally printed graphics in North America is expected to grow from more than $19 billion in 2013 to almost $22 billion in 2018, a five-year compound annual growth rate of 6.8 percent. That isn't the most scintillating growth rate, but it is very nice compared to the overall printing industry – and is certainly more aggressive than we had postulated before conducting the study. Two important findings from the research reinforce the idea that the display graphics market will continue to prosper over the forecast period:
1. Digital wide-format printing will continue to capture volume from analog processes (including screen printing) based on the increasing use of versioning, micro marketing, and cross-media marketing. Run lengths will be shorter and variable data will be involved more often. These trends aren’t new, but they will escalate because the pressure is on marketers to prove the ROI of their investments and drive higher levels of interaction with their targeted audience.
2. Digital wide-format printers will continue to facilitate new market development. There is intense interest in using inkjet technology to conquer opportunities in packaging, decorative products, and garment printing. Again, this is hardly new, but the increasing commoditization of some mainstream display graphics applications such as posters and banners is fueling the desire and, really, the need for many printing organizations to find new markets and areas of profit.
One of the very interesting findings from that research concerned possible threats to the digital wide-format market. One that I point to with some frequency is digital displays, which allow marketers to target their advertising and promotional messages in a much more dynamic way than static signage. In the research we did, many buyers indicated they might possibly shift advertising dollars out of digitally printed wide-format graphics and into digital displays. More than a quarter of the print service providers (PSPs) we talked to said they are seeing some erosion of their business because of digital displays.
We've also developed a forecast of the digital display/digital signage market in North America. IDC expects the digital display business, valued at more than $12 billion in 2013, to grow at a rate of about 27 percent per year through 2018.
I've been following digital signage as part of the work I do in wide format for years. What I’m finding is that digital displays have entered into a third phase of market development that should drive additional investments from new customers, the growth of existing digital signage networks, and higher renewal rates of subscribed digital signage software.
We also found that many digital signage companies are similar to PSPs in trying to figure out how digital signage can connect with mobile device advertising. One example is using the data on mobile phones to understand retail traffic flows and buyer behavior in order to present information in more intelligent and actionable ways. That has long been the promise of digital signage, but only now, in its third generation of products and services, are we seeing it really happen.
Finally, we’re currently working on a forecast of the rapidly growing and changing 3D printing market. To do this, we’ve been interviewing many of the market leaders, and it has been fascinating. We see 3D printing growing at more than 34 percent per year through 2018, as new technologies come to market and exciting new applications are developed for them. We expect 2016 to be a big year because HP's 3D printer, which promises to be faster than any current system, should become available.
Many people we speak to wonder how much of what they hear about 3D printing is real and how much is hype. This is a legitimate question because I don't think we've heard as much about a rapidly developing technology since the internet in the dot-com days of the early 2000s.
One common thread we see across all three of these markets: Everyone is considering new elements of digital printing, digital signage, and 3D printing as additional services that could be offered to drive revenue. These markets are all growing; the question, or challenge, is whether stakeholders in the printing industry are able to branch into these new fields successfully. Our research indicates that, for the most part, companies that are thinking of investing in a digital signage system seldom consider a “sign company” as a source for such services. As PSPs get into these markets, they face a whole new group of competitors. But none of these opportunities have a secret formula for success. Just as in your traditional business, you have to be able to demonstrate your competence in a new capability in order to get the business.