Myriad factors are creating a volatile environment transforming the types of signage and graphics found in retail stores.
Bales: We need to be careful, not that we can do anything about it, but the capacity in the industry is far outstripping the demand. With the latest innovations in equipment, print speeds have increased exponentially, so the capacity that any one company has is far above what it had in the past. I don’t care what major manufacturer’s equipment you have—it’s all going to produce commercially acceptable quality, and therefore it is a commodity by definition. So differentiators come from the distribution side, the value you add to the print, and your ability to turn a graphic into something that creates an experience. From our standpoint, the front end is where buyers today have far less experience and more pressure on them to get things accomplished with fewer resources.
SP: Are run lengths continuing to fall, and is a demand for more variable-data work helping to drive that?
Bales: We believe runs lengths are still decreasing. Even for a large chain, they are customizing each store to try to get more out of their budgets. Before, we used to do a rollout and every store would get the same kit. After studying it and doing some case studies, we found out stores are throwing away 20-50% of the items because the store configurations are different and they can’t put the same things up everywhere. Now, people are beginning to understand what they have in each location. Every store almost becomes its own kit, which changes your run lengths on everything that you do.
Blee: When you get into the super big box category with multiple thousands of locations, I don’t think customers realize how shallow of a vendor pool is out there. Let’s say you have chain with 8000-10,000 locations. From what I’ve seen as the technology shifts from screen to digital, I think there are fewer companies that can handle it. Digital is obviously the way of the future, but I still see a capacity speed gap between 2000-8000 sheet runs. I can’t do them at the same speed with my digital equipment, and there becomes an intersection point when the cost of machinery and ink associated with it favors analog.
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