"Reset" Economy Brings Cautious Optimism

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					          State of the Industry
                 Report – Part 2
           “Reset” Economy
   Brings Cautious Optimism
   By Denise M. Gustavson                                             Image Technology US, LLC, agrees. “I think many shops
                                                                      have looked at their operations and the efficiencies thereof
       Last month, we took a snapshot of the wide- and grand-         as stated earlier, and they have also looked at this as a time
   format industry, and looked at how business has been over          to focus on market share in their key segments.”
   the last year. In this article, I’ll focus on the future aspects        “Every shop is different in their strategy to grow through
   of the market: what areas show the largest opportunity for         this economy,” said Ken Van Horn, product marketing man-
   growth, what technology will drive change forward, and             ager, EFI. “Many shops took a very aggressive approach and
   where we see ourselves in one year’s time.                         continued to invest in the technology and workflow manage-
                                                                      ment systems that would enable them to not only capture
   Coping Mechanisms                                                  more business but also become more profitable. As custom-
       As discussed before, no segment of the wide-/grand-for-        ers add production they are also looking for predictable
   mat market has been exempt from the downturns brought              uptime and running costs. So enhanced service and support
   on by the current global recession, with some shops seeing         is critical.”
   profits decline 30 to 50 percent from the previous year. This,
   in turn, has forced many to make tough decisions in order          Cost Reductions
   to keep their businesses afloat.                                        The primary way many businesses have coped—across
       “Both from a sales and operations standpoint we see            all industries—has been though close control of costs. We’ve
   people making changes to their business,” said Tim Greene,         seen the reports of the increasing number of the unem-
   director, Wide Format & Jetting Technologies, InfoTrends.          ployed and, unfortunately, the wide-format industry has had
   “From a sales standpoint we have com-                              its share of layoffs and cuts.
   panies reporting that they are taking a                                 “We’ve seen workforce reductions
   harder look at new vertical marketing                              at shops, as well much greater com-
   strategies and more aggressively pro-                              petition for business with customers
   moting and discounting their services.                             who’ve established long-standing rela-
   From an operations standpoint we see                               tionships with particular fabricators,”
   people doing what they have to do to                               said Joseph N. Masters, graphic dis-
   drive down costs, reducing employee                                play marketing manager and sustain-
   hours, using more third-party ink and                              ability manager, Alcan Composites
   media, and using less expensive types                              USA.
   of media that may not be as durable,                                    “In general, PSPs are streamlining
                                               Joseph Mergui
   but satisfies the need for short-term                              their operations, laying off employees Joseph N. Masters
   promotional graphics.”                                             and consolidating production on cer-
       According to Joseph Mergui, presi-                             tain printers. The challenges are likely
   dent, Caldera, many shops are reacting                             to remain immense as long as excess
   wisely. “They invest in securing their                             capacity remains,” said Adam Florek,
   assets, managing workflow, monitoring                              research analyst, Lyra Research, Inc..
   costs and labor time. They also invest                                  “Some are cutting costs and right
   in new equipment, not just to replace                              sizing their businesses for this ‘reset
   simply an old one, but to secure a bet-                            economy’,” said Rick Scrimger, vice
   ter profit ratio per square foot,” he                              president/general manager, Roland
   said.                                                              DGA, “while others haven’t seen the
       Christopher Howard, senior vice          Christopher           impact based on their niche and local
   president, sales & marketing, Durst            Howard              territory. Some shops closed their         Rick Scrimger

Description: In the next 12 months we'll see several new technologies and initiatives emerge that will shake up the sign industry significantly, and those who are capable of embracing that change will thrive. With the exception of ensuring a 'green' product, though, customers don't care how their sign was produced - they just want it now and they want it done right," said [Lee Manevitch]. "Ease of use has improved. Software has improved.
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