The U.S. Print Management Market: Growth through Innovation

Will Morgan
Jul 9, 2019

Keypoint Intelligence – InfoTrends’ Customer Communications Advisory Service recently published an analysis piece exploring the U.S. print management market, its workflow challenges, and projections for growth. This blog focuses on the growth opportunities. Please read the full analysis if you’re interested in learning more about the workflow challenges.

Sometimes known as “marketing execution services,” “brand deployment,” and “marketing print management,” the print management market is a slice of the broader customer communications ecosystem that sees enterprise clients outsourcing print and related spending to a third-party provider (also known as a distributor or broker) who leverages a network of manufacturers to procure the company’s printed marketing materials and promotional products. Through consolidated purchasing, print management providers offer cost savings and upgraded efficiencies that in-plants struggle to match, as well as a wider array of products, applications, and expertise than a single print manufacturer can manage.

In its latest financial review of the print management space, InfoTrends projected that the sector would experience a compound annual growth rate (CAGR) of 6.5% between 2016 and 2020. This growth is primarily fueled by expanded services and applications beyond traditional print on paper as enterprises continue to push providers toward end-to-end global solutions.

Figure 1: Print Management Market Growth in the U.S.

These assumptions remain in keeping with more recent data and the insights of industry stakeholders. Tod Ellington, COO of thumbprint, explained, “The average client’s needs have become much more complex, forcing providers to move toward more sophisticated web technology, to get more creative in sourcing, and tighter in their integration with clients.” As a result, the traditional broker model has become vulnerable to intrusion from procurement software sales directly to small businesses. Meanwhile, larger enterprises are gravitating toward more comprehensive solutions. Kevin Sherlock, Founder and CEO of SupplyLogic, cautions, “There is a great distinction between pure procurement brokers and companies providing full, end-to-end marketing execution partnerships. The brokership model is now small and in jeopardy.”

In both the print management market and the industry at large, traditional print-on-paper has become commoditized, dropping in price and production volume. Growth has shifted to more dynamic applications like promotional collateral, signage, and point-of-sale (POS) displays. “Promo is expanding rapidly,” Ellington explained. “A few years ago, it only made up 10% or 20% of a distributor’s business, but this has climbed to 30% or 40%. Clients are also seeking broader services and an expanded suite of products in POS and signage. Providers offering a broader range of services to larger clients naturally have a more significant portion of their business tied up in POS than smaller brokers serving the traditional print market.”

Joe Walkup, President of the distributorship IBP and the immediate past president of Print Suppliers and Distributorship Association (PSDA), declared, “Our clients are spending more money on direct mail, promotional, signage, and POS thanks to the strong economy. Applications like corporate signage, banners, and POS are ripe for disruption. There is a huge opportunity for the bigger players to come in and really dominate signage.”

According to Stephan Hackert, Vice President and Industry Lead for Healthcare, Automotive, Banks, and Insurance at Arvato, “POS has grown into more refined work. Everyone is seeking differentiation through digital engagement and interaction, or they are looking to bring costs down while remaining competitive. There is now a wide range of quality in the space, from pure digital interactive displays to simple commodities.” On the cutting edge, interactive features like compliance monitoring and electronic footfall tracking are gaining ground in POS, enabling marketers to obtain a more complete picture of a campaign’s ROI without endangering data privacy. The integration of augmented reality into POS can generate positive buzz for a brand through word of mouth.

Beyond technological innovations, sustainability is another important factor for market expansion. All companies care about improving their public image and promoting sustainable sourcing throughout the whole supply chain, particularly when dealing with highly visible collateral like POS. Alan Paul, CEO of sourceit, observed, “Clients in the U.S. are beginning to demand diversity in the supply chain like their European and Australian counterparts. This means more indigenous sourcing, and minority/woman-owned providers are now required in the chain.”

Warehousing arrangements, whether they are handled by the provider or a third party, are most directly influenced by the needs (and size) of the client. Sarah Scudder, President of the Real Sourcing Network, explained, “We see POS increasingly moving toward print-on-demand. Whenever possible, suppliers produce what they need for an auto-shipment and make items available for re-order via an online system. Kitting is an important part of POS. Materials often need to be kitted in individual boxes for shipment to multiple locations. If warehousing is required, a central location is selected to minimize freight expense and transit times. Integration with a storefront or print purchasing system is essential to the efficient management of inventory.”

According to Sherlock, “The corporate world has really embraced third party support, and because of that, the marketing execution services market in the U.S. has seen steady growth, going from $200 million in 2002 to somewhere between $8 to $10 billion today… and 60% of that is POS! That’s what will stick around.” Alan Paul adds, “A total market size of about $8 – $10 billion in the U.S. sounds about right, but the opportunity is actually bigger when you throw in promo and all of the front-loaded creative costs that the big guys try to take. I’d say that about 10 companies in the U.S. are controlling $10 billion worth of print.”

It should be noted that these bullish claims exceed the expectations projected by InfoTrends and other data analysts, which estimate that the print management market will only be valued at around $5 billion by 2020. While some may see this incongruity as a troubling disconnect, we believe it may be sign that there is a hidden opportunity not fully aggregated in current projection models. One thing is clear—the print management market is growing and, in a landscape of rapidly developing technology and evolving marketing strategy, operators in the space may be poised for real advancement.

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