Wide Format & Signage September 2020 by WhatTheyThink

SEPTEMBER 2020

A CHANGING

ENVIRONMENT Environmental graphics evolve with the pandemic. p.36

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40 H ow to Use Signs to Build a More Connected Community 48 I SA Quarterly Economic Report Forecasts Long Road to Recovery 52 I s Cut-and-Sew a Barrier to Reshoring in the Textiles Industry?

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INSIGHT YOU NEED. ANALYSIS YOU TRUST.

Your comprehensive source for emerging trends in our evolving industry.

08 The New Reality: VR, QR, AR, and Interactive Print Merge the Digital and the Physical

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EDITORIAL ─ Unworldly Time Of Social Isolation

CONVENTION IN A

TIME OF COVID

Frank Romano RIT Professor Emeritus fxrppr@rit.edu

e live in a new world where too much human intermingling

might result in death. In 1959, I joined the Mergenthaler Linotype Company in Brooklyn in the shipping department. I rode in the back of a truck to the New York Coliseum, which had recently opened. I walked the aisles of my ﬁrst printing trade show and I was in awe. I was at PRINT 68, the ﬁrst trade show of the modern era. The printing industry was in one place at one time. It was exciting. As of 2019, I had attended every major printing trade show and conference.

We are now re-inventing the way suppliers market to the printing industry.

Read More… Find article at PrintingNews. com/21142681

Back in the 1990s there was a movement by some exhibitors for “house” events. Xerox and Kodak ﬂew thousands of prospects to Rochester, NY. In fact, Xeikon had a giant sign erected at the airport: “Welcome to Rochester. Xeikon.” Heidelberg brought them to Atlanta. Canon brought them to Long Island and Boca Raton. HP used its giant user group Dscoop as its primary promotional vehicle. As a result, exhibit space at trade shows

WhatTheyThink - Printing News | September 2020

began to shrink. Fortunately, many new suppliers arose in the digital era. Exhibitors became fed up with exhibit facilities. As the Marcom Manager for Compugraphic in 1971, I carried $1,000 in cash with me to grease the palms of electricians, riggers and others. Now we are in a time of pandemic and all trade shows have been postponed. We will probably not meet again in person until 2021. Heidelberg says they are pulling out of drupa, which is re-scheduled for April, 2021. Heidelberg had always been the largest exhibitor at major events. Larger companies will be able to deal with this unworldly time of social isolation. They can bring prospects to local demo centers one by one. Smaller exhibitors are at a disadvantage. We are now re-inventing the way suppliers market to the printing industry. Which brings us to the virtual trade show. A virtual trade show is like eating candy with the wrapper on. It is one way that suppliers can get their messaging to the market. Other channels are video advertising and webinars. Both let companies demo products. Once there were 20 magazines reaching the printing industry. That number has dwindled, but those remaining provide an important channel to the market. We might even see a resurgence of print advertising and even direct mail. Virtual direct mail? It’s called email. The printing business will continue. ●

For more information, visit PrintingNews.com/10013323

VP, GROUP PUBLISHER Kelley Holmes kelley@whattheythink.com 772-579-7360 PRODUCTION EDITOR & MANAGER Amy Hahn amy@whattheythink.com EDITOR Jessica Taylor jessica@whattheythink.com

CON SEPTEMBER 2020

MANAGING EDITOR Richard Romano richard@whattheythink.com SENIOR EDITOR Cary Sherburne cary@whattheythink.com

Cover Story

PACKAGING: HYBRID AND BESPOKE SOLUTIONS

BUSINESS DEVELOPMENT Paul Zimmerman paul@whattheythink.com 973-727-1376

Using component technology expands print options.

PRESIDENT Eric Vessels eric@whattheythink.com 740-417-3333

By David Zwang

PRINTING NEWS

COO Adam Dewitz adam@whattheythink.com CONTRIBUTING WRITERS Leah Edwards Preston Herrin Arnold Kahn Steve Johnson David Zwang Kevin Keane John Giles Jennifer Matt

Michael McDonald Paul Miller Dino Scalia Heidi Tolliver-Walker

CREATIVE SERVICES Bobbi Burow, CreativityTank LLC bobbi.burow@gmail.com SUBSCRIPTION SERVICE For change of address or subscription information email: help@whattheythink.com Published by WTT Media, Inc. 2038 Ford Parkway #218, Saint Paul, MN 55116

ARTICLE REPRINTS Please contact your account executive PrintingNews.com PrintingNews.com—the web portal representing content from Printing News, Wide-Format & Signage—is devoted to delivering you timely news and multimedia content on a daily basis. WhatTheyThink (ISSN 2642-3189) (USPS 500-850) Volume 43, Number 10 is published ten times per year in January/February, March, April, May, June/July, August, September, October, November, and December by WTT Media, Inc., at 2038 Ford Parkway #218, Saint Paul, MN 55116. Periodicals postage paid at Saint Paul, MN and additional mailing offices. POSTMASTER: Send address changes to WhatTheyThink, 2038 Ford Parkway #218, Saint Paul, MN 55116. Subscriptions: Individual subscriptions are available without charge in the U.S. to qualified subscribers. Publisher reserves the right to reject non-qualified subscriptions. Annual subscription prices in the U.S.A $95; Canada $125 USD; all other countries $150 USD. Printed in the USA. Copyright © 2020 WTT Media, Inc. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recordings or any information storage or retrieval system, without permission. WTT Media Inc. does not assume and hereby disclaims any liability to any person or company for any loss or damage caused by errors or omissions in the material herein, regardless of causation. The views and opinions in the articles herein are not those of the publishers, unless indicated. The publishers do not warrant, either expressly or by implication, the factual accuracy of the articles herein, or of any views or opinions offered by the authors of said articles.

12 18 22 26 28 32

- PAGE -

PRINTING AND CYBER RISK

Deal with IT or die from IT. By Kevin Keane SYSTEMIZE THE PREDICTABLE IN YOUR PRINT BUSINESS

Save your humans for the things that require skill. By Jennifer Matt PACKAGING IS CHANGING

Is it to our beneﬁt or our fault? By David Zwang NEWLY AGILE

Crisis demands new agility, not a new normal. By Preston Herrin PIVOT POINTS

Change management is an important factor in today’s HR practice. By Arnold Kahn and Dino Scalia TAKE ACTION NOW TO SURVIVE THE FUTURE

Many printers are now reviewing their business practices as they deal with what they have learned from the lockdown. By John Giles

WhatTheyThink - Printing News | September 2020

NTENTS COLUMNS

WIDE-FORMAT & SIGNAGE

36 40 44 48 52

A CHANGING ENVIRONMENT

Environmental graphics evolve with the pandemic. By Richard Romano

BUILD A MORE CONNECTED COMMUNITY DURING A PANDEMIC

Sign companies have had to quickly adapt to provide more relevant signs for the ever-changing situation. By Leah Edwards SMART STORES

Benson creates a W2P store for COVID signage and safety materials. By Richard Romano

A WRINKLE IN THE PLAN

Is cut-and-sew a barrier to reshoring in the textiles industry? By Cary Sherburne

Portrait of a Pandemic By Richard Romano WHAT BUYERS WANT FROM BRANDS

...Right Now By Heidi Tolliver-Walker

EXECUTIVE Q&A

GONE VIRTUAL!

JOHNSON'S WORLD

ISA QUARTERLY ECONOMIC REPORT

It's a long road to recovery. By Richard Romano

PRINTING PULSE

Talking Textiles By Cary Sherburne

Techtextil North America & Texprocess Americas Symposiums will be virtual for 2020. By Cary Sherburne

Don't Keep Secrets By Steve Johnson

40 DEPARTMENTS

4 30 34 43

Editorial Printing Industry News Watch List: Video Wide-Format & Signage Industry News 56 Textile Industry News

64 ClassiďŹ eds/Supplier Directory

FOLLOW US twitter: @PrintingNews; @WideFormatSign; @whattheythink facebook: Printing News; wideformatsignage; @whattheythink linkedin: Printing News; linkedin.com/groups/1780044; whattheythink youtube: PrintingNews.com

LABELS & PACKAGING ─ Hybrid & Bespoke Solutions

PACKAGING: HYBRID AND BESPOKE SOLUTIONS Using component technology expands print options. By -David Zwang

ybrid, or “multiple connected printing and finishing technologies,” have been around for decades, although not as prevalent as they are today. With the growth and availability of disparate inkjet components and solutions, combined with the growth of machine and process digitization, bespoke solutions, or “custom designed applicationbased printing,” is the natural extension of the same hybrid capabilities. Historically, these types of solutions were relegated to flexo transports combined with other

imaging, embellishment and finishing technologies. I remember seeing my first example of this in the early 1980s, designed for the production of cigarette packages, decorative paper cups and assortment of party goods. In this case the flexo printing was joined by gravure, silkscreen and offset printing combined with a variety of foil, embossing and die cutting all inline, and ready for nearline assembly and gluing.

Where are we and where are we going? Fast forward to 2019, when I had an opportunity to visit IGT (International Game Technology PLC) in

WhatTheyThink - Printing News | September 2020

Oklahoma, where they produce lottery and gaming tickets. Their bespoke presses were specially designed to print 21 different “color plates” using a variety of printing and embellishing technologies on the front and back, to support the enhanced graphics and high levels of security required. In essence, they are printing a form of currency. Without going into all of the detail (for which I can’t), I can say that on these application-specific

presses they are using a minimum of flexo and inkjet. Bespoke solutions are moving print from a standalone process to become a part of the product manufacturing process. Direct object printing of bottles, cans and other containers on the production line are replacing label applications and will continue to grow to allow FMCG (Fast Moving Consumer Good) manufacturers the content and time flexibility required to support the changing market requirements. Changing market demands go beyond the packaging process itself to packaging types, repackaging and how they need to change to support the new distribution demands. Designed well, purposebuilt bespoke solutions provide more cost effective and timely solutions with fewer setups and less handling. This concept is evidenced in the HP and partners pouch factory for under $3 million. We are also starting to see more digital print solutions in place of flexo as they are increasingly

available to satisfy the requirements of shorter “on-demand” runs. Granted, the electrophotographic and inkjet solutions currently available are slower than the flexo solutions, with limited production capacity compared to flexo. However, that is not necessarily a bad thing, because it allows you to create focused and more optimized production processes based on specific requirements instead of trying to fit work with different requirements into the same production processes. Designed well, that could provide more cost-effective and timely solutions with fewer setups and less handling. By using component technologies, you can almost build bespoke built solutions like you would LEGO. This is the approach that HP has been taking the label and flexible packaging market. Their Indigo print engines come in a variety of sizes and speeds but are all basically the same imaging engines. In order to offer the market the added value of digital print, they have been working with many other solution partners to develop purpose-built solutions. These include a number of label types, shrink tubes, a variety of flexible packaging and more recently, pouch production. This creativity in purpose-built solutions is forcing flexo providers to partner with both digital and finishing providers like AB Graphic International to follow the HP lead and become more competitive. Memjet OEMs like Colordyne and others are increasingly integrating their printheads into a

LABELS & PACKAGING ─ Hybrid & Bespoke Solutions

variety of different machines to support a variety of stand-alone print applications, as well as print as a function of product manufacturing, including 3D. Ultimately, if we are going to achieve the dream/ reality of “Industry 4.0,” this type of production approach will have to become more mainstream. The industry is ready. Packaging industry trends seem to indicate a desire to run more operations in line to minimize handling and waste, and to keep turn times low for the increasingly short-run jobs. Interestingly, the packaging market is having many of the same discussions that commercial print had been having for years: inline, nearline, offline, and when does it make sense to create a complete purpose-built production line? Kodak, no stranger to inkjet, has worked with partners Graphic Systems Solutions (GSS) and Tresu to integrate new or refurbished flexo stations to enable the combination of digital and flexo printing. The best example is the installation at Zumbiel Packaging, where GSS refurbished Stevens graphics flexo stations allow Zumbiel to leverage the benefits of lower cost flexo inks for most of the package, while adding digital inks where it is needed on their folding carton press. This model has helped Zumbiel control its costs and provide more economical and lower minimum order quantities to its clients. This type of configuration would require about six to eight months of engineering preparation for installation, at a market price 25% to 30% below

other production inkjet presses now in the market, but with the capability to run at 650 fpm, much faster than these other inkjet digital solutions. Digitization of controls has allowed many of these printing, ﬁnishing and embellishment technologies to shrink in size and adapt to the new integration requirements. In the case of labels and packaging,

Packaging industry trends seem to indicate a desire to run more operations in line to minimize handling and waste, and to keep turn times low for the increasingly short-run jobs. the large amount of finishing variants and packaging requirements dwarf those in commercial printing, so it may make sense to develop more purpose-built systems and components, but we will see technology cross over to other print applications. These hybrid and bespoke systems are not just relegated to inline flexo transports, Kodak is currently working under NDA with a number of CI press manufacturers to design the configuration of mount + head+ dryer systems closer to the central

WhatTheyThink - Printing News | September 2020

Continued on page 62

SMART CHANGE STARTS HERE.

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LEARN MORE ON HOW CANON CAN HELP YOU SUCCEED: PPS.CSA.CANON.COM/CHECKLIST Canon is a registered trademark of Canon Inc. All other trademarks are the property of their respective owners and are hereby acknowledged. All rights reserved. ©2020 Canon Solutions America, Inc.

For more information, visit PrintingNews.com/10155072

MANAGEMENT â&#x201D;&#x20AC; Cyber Security

WhatTheyThink - Printing News | September 2020

PRINTING AND

CYBER RISK

Deal with IT or die from IT. By Kevin Keane

local TV station had the story in February 2016 – a Lubbock, Texas, commercial printing business called Caprock Business Forms had been knocked offline by ransomware. Two years later they closed up shop and the assets were auctioned. Coincidence? Colorado Timberline, an apparel printing business abruptly closed in mid-September 2018 after reporting that its systems were encrypted by ransomware. The firm had recently been acquired by two private equity firms who saw a good opportunity to make money. Regrettably, so did the ransomware pirates. This summer saw reports that Xerox in July and Canon in August may have been hit by the MAZE ransomware gang. Clearly, every size business must have a plan to deal with cyber risk.

The attack surface in the time of COVID-19. You have managed and you are managing through the unthinkable. Your teams have found ways to work from home and still be productive. Your business has taken a punch, but you are still in the ring. Unfortunately, your attack surface now extends to every device a given employee

may use to access your networks. Each device is a potentially vulnerable endpoint, a possible backdoor for the cyber crooks. Every employee’s home router with a default password or firmware that has not been updated ratchets your company risk. The home wifi network of your shipping manager is just as good an entry point as your own home wifi for the determined cyber thief. At a minimum you need a mobile device management (MDM) solution and you need an effective repeatable training regimen for every employee from custodian to CEO.

Tone resounds top-down. If you are the owner, managing director or COO of a commercial printing company, you must set the tone on managing cyber risk in your business. If you don’t make cybersecurity a priority, your employees will model risky behaviors too. All too often we see the CEO offer the limp excuse that they are just too busy to take the information security awareness training that is required of all employees. The American Bar Association “Model Rules of Professional Conduct” require that lawyers maintain the requisite knowledge and skill to manage change in the practice of law including the beneﬁts

MANAGEMENT ─ Cyber Security and risks associated with relevant technology. Printing company managers must also embrace competence in order to effectively deal with cyber risk.

It’s not just ransomware that will rob you of sleep.

Read More… Find article at PrintingNews. com/21142826

Consider this news from late March 2020: Security researchers discovered that Doxzoo, a British document printing and binding company, suffered a major security breach exposing personal documents of hundred of thousands of its customers. The incident is said to have violated copyright laws and potentially released British military information. The researchers, a team from vpnMentor, uncovered a leaking S3 Bucket with more than 343GB of data’s worth of records on an Amazon server run by Doxzoo. The company provides printing and binding services for customers worldwide, and the leak includes print jobs for many high-profile clients, including elite UK universities, U.S. and UK military branches and Fortune 500 companies.

Printing company managers must also embrace competence in order to effectively deal with cyber risk. Even a cursory Google search will find story after story about a data breach caused by error (most often human error) at a printing company. If you are fortunate enough to employ your own CISO (chief information security officer) or if you contract with a managed services provider (an outsourced IT services company) you need to have a council of war. Their prideful default position will be “we got this.”

WhatTheyThink - Printing News | September 2020

You must over-ride that and ask for their partnership in a remorselessly searching review of your company’s cybersecurity posture, because none of you wants to be “in the news” in the manner shared immediately above. If, as is more likely, you have neither an internal CISO nor a contracted MSP, you would do well to implement the following three steps: 1. Hire an information security consulting firm. Give them the task to provide an in-depth assessment of your current network systems (both internal and external networks) – the consulting firm will provide a thorough review of your company’s ability to protect your data and to assure the “CIA” trident of confidentiality/integrity/accessibility of that data. This project will not be cheap, but it will go a long way to keep you in business. 2. Invest in a monitoring and earlydetection solution. You need an actively monitored endpoint detect and response (EDR) solution. An EDR can shorten the timeframe in which external attacks and network penetrations are detected. The longer an attacker is inside your networks, the greater the ability of the attacker to move laterally inside your networks, perhaps acquiring additional passwords or other permissions or perhaps escalating credentials for the attacker while restricting credentials for your team. And remember that COVID has rearchitected the span of your attack surface. Delay in realizing that your networks have been compromised drives up remediation and recovery costs for your business.

3. Invest in a SIEM system to log and trace attacks. A security information and event manKevin Keane is an attorney with expertise in cyber law and privacy, franchising, agement (SIEM) solution will monitor critical and licensing. You can reach him at kevin@redteamsecure.com. logs from all your firm’s network devices. Your SIEM is a crucial weapon in tracing attacks and establishing which computing infrastructure elements have been compromised. Without a SIEM solution it will likely be extremely difficult to determine the extent of an attack, which presents problems driven by government mandates about data breach notification and the fact that more and more companies and organizations are evaluating the cyber poster of any vendor in their supply chain. The pandemic has sped up digital transformation in every industry, from medical to law to retail to print. More and more business is getting done online and that makes securing your perimeter, your information security policies and procedures and your networks the price to stay in business. We must model good cyberhygiene at home and at work. The “No More Ransom” website is an initiative by the National High Tech Crime Unit of the Netherlands’ police, Europol’s European Cybercrime Centre and several information security product vendors. The site has excellent prevention advice, and is recommended reading for you and your management team. ● For more information, visit Printingnews.com/10005202

PRINTING PULSE ─ Economic Impact

PORTRAIT OF A

PANDEMIC The charts tell a dismal tale. By Richard Romano

t was touch and go for a while, but it may not be as bad as we thought. Printing shipments for May 2020 came in at a dismal $6.42 billion, down from $6.51 in April and way down from $7.21 billion back in January. On the plus side, we were expecting it. On another plus side, it’s not as bad as February 2018, and back then we didn’t have a global pandemic causing the problem. On perhaps the best plus side, shipments rebounded in June to $6.63 billion. And to round out (as it were) our tetrahedron of plus sides, that’s better than July 2017. The seasonality of shipments that had evolved over the past several years is pretty much out the

window, so it’s hard to know what to expect from month to month except that “businesses are reopening/reclosing.” In June, we saw places start to reopen as the virus was more or less under control in certain

parts of the country (like the Northeast), so we have a sense that July shipments data will continue to rise— maybe not dramatically, but not inconsequentially. We may even see an uptick in August, but the big worry is that as infections have been spiking dramatically in other parts of the country, businesses may need to close again. And there is the schools reopening thing. We’re by no means out of the pandemic woods, and should not in any way get complacent (or more complacent). Year-to-date shipments have thus been slipping vs. 2019. January-to-June shipments for 2020 are $40.79 billion compared to $41.90 billion for January-to-June 2019. It’s doubtful we’ll make up that ground by year’s end, but then we’d be happy to be wrong. (We do seem to be saying that a lot lately.)

The Words of the Profits Annualized printing profits for the halcyon days of Q1 2020 took a nosedive from $990 million to -$4 million. Back in April, we saw Q4 2019 profits plunge—and Q4 was before anyone but a few epidemiologists had ever heard the term “coronavirus.” The drop from Q3 to Q4 wasn’t quite as dramatic, but the pandemic—what there was of it in Q1—only accentuated trends that were already well-established. (Heck, we as an industry don’t need a major crisis to lose profitability.) It’s just the umpteenth chapter in our “tale of two cities” narrative. In Q4 2019, for large printers (those with more than $25 million in assets), profits before taxes had been -1.99% of revenues. In Q1, this plummeted to -7.96% of revenues. But for small printers, profits before taxes in Q4 were +3.15% of revenues. In Q1, this grew to +5.69% of revenues. So it continues to be a case of large printers continuing to drive down overall industry profitability (in Q4 2019, this wasn’t helped by a decline in small

WhatTheyThink - Printing News | September 2020

printers’ profitability). For the industry on average, profits before taxes were -2.57% of revenues, and for the last six quarters, they’ve averaged +0.09% of revenues. We were expecting the Q1 profits report to serve as a kind of prelude to the ultimate impact on industry profits, which we expect will come to fruition in the Q2 report, which we will see in September—at which time we may be able to say, “Ah, Q2 profits

were terrible, but we expect Q3 proﬁts to start to show the recovery.” As we also say rather a lot these days, hope springs eternal. However, we said back in March and April at the start of all this that if we got the virus under control by June or July, we might be able to pivot back to something approaching normal. Unfortunately, we failed to even remotely get the virus under control, and now we run the very real risk that August or September will be the new March. People were predicting a second wave of the pandemic in the fall, but it’s clear that we are still at the crest of the ﬁrst wave. There was a time when we were optimistic. That time is gone. Another ancillary effect we need to worry about is one that results from pretty much every recession or economic downturn: a major continued shift to electronic media. Usually it is for cost reasons as

marketers and other businesses Read More… seek to use less expensive media Find article at channels, but the COVID crisis PrintingNews. is bringing other factors into the com/21142758 mix, such as the fact that, during the lockdown, everyone who was able to avail themselves of online materials did so. Sure, print book sales were up, but we all just got used to doing more and more things online and using our phones. To cite just one example, in a Library Journal study that examined the COVID response by academic libraries*, university and college librarians were almost unanimous in their belief that university libraries will be jettisoning their print collections in favor of electronic alternatives, especially if distance learning at the university level plays a bigger and bigger role. Combine that with a major trend toward Open Source e-textbook content, the textbook printing industry could be in big trouble, if not the textbook publishing industry as well. To cite another example, the pandemic is also taking its toll on magazine and newspaper publishing, both of which had been on the ropes even before the crisis. So we are starting to see some lasting trends starting to set in. We should be prepared.

This Macro Moment At the end of July, the Bureau of Economic Analysis (BEA) released an “advance” estimate of second quarter GDP. One thing’s for sure: this pandemic is making Microsoft Excel chartmaking one heck of a challenge: Said the BEA: Real gross domestic product (GDP) decreased at an annual rate of 32.9 percent in the second quarter of 2020...according to the “advance” estimate released Continued on page 63 * See https://bit.ly/2DoJBSY. † See https://bit.ly/2Xcjk1l.

SOFTWARE & WORKFLOW ─ Systemize The Predictable Business Processes

SYSTEMIZE THE PREDICTABLE IN YOUR PRINT

BUSINESS

Save your humans for the things that require skill.

was recently training a printer on how to sell business-to-business web-to-print storefronts to their existing customers. One of the longterm employees said something like this: “Every single print job we produce is unique, so none of this will work for our customers.” I bet most of you reading this can either relate to that statement or can easily point to an individual in your organization who firmly believes it. This is a real problem in our industry. We are rooted in this belief that we are unique, our customers are unique, every one of our jobs is unique and therefore we have to staff

our print businesses with people who are required to make unique decisions in real-time. Basically there can’t be processes or automation because the print industry is so unique it has to be run by humans. Nothing could be further from the truth. The print industry is no exception and printers cannot

WhatTheyThink - Printing News | September 2020

Jennifer Matt writes, speaks, and consults with printers worldwide who realize their ability to leverage software is critical to their success in the Information Age.

For more information, visit PrintingNews.com/10004777

SOFTWARE & WORKFLOW ─ Systemize The Predictable Business Processes afford to continue to run their print businesses according to this outdated model. Here’s a quote which I feel sums it all up. “Systemize the predictable, so you can humanize the exceptional.” —Gino Wickman Your print business is not binary. It can’t all be systemized and it can’t all be humanized. You have to split the two apart and systemize the predictable so your humans are only deployed for the exceptional. I was on another call last week: an early implementation call with a printer who just purchased an online ordering solution. I always ask about business objectives at the beginning of implementations. It’s a way for me to understand what the printer learned (or didn’t learn) during the sales process. What you’re hoping for is that the printer’s business objectives for deploying this new technology actually fit what the technology can do. There are often surprises to this, and misunderstandings that happen during a sales process. So this printer said they want to empower the customer by giving them access to more information about the business they are doing with them so they can answer questions themselves (order history), easily place re-orders, and check order status when it’s convenient for the customer. This will equate to the customer service team having more time to “humanize the exceptional” because they are going to “systemize the predictable” by implementing an online order entry system. The predictable here is not controversial. Do your customers want to have access to order status? Do your customers want to have access to all the products you print for them? These are predictable. These can be systemized—and let’s say that another way: you don’t have to continue to pay human staff to read emails that say, “When is my order shipping?” and then look into your Print MIS to find that information and email the customer back. That is not a good use of humans and it sure as heck isn’t “exceptional.” What if we looked at print software as a toolset to help us “systemize the predictable”—how would that change your approach to Print MIS, web-toprint and prepress automation software? I have

some suggestions about this because the focus of these tools should be to systemize. Yet we spend almost no time even identifying the core processes that we want to systemize. When you buy a Print MIS, you should be thinking about how this tool is going to systemize estimating, job control, job costing and raw materials inventory, to mention a few. When you buy a web-to-print solution, you should look to systemize customer service. Same goes for prepress automation. If you’re not demanding a better workflow for the collection of customer artwork, the artwork approval process, and the version control process, then you’re not optimizing your investments. This is an incremental process that never ends. You will always be “systemizing” something in your business. You want to protect your humans from being stuck in the basic operations of your business. If it takes your best people to get a standard job shipped on time, that’s a good sign you haven’t systemized. You want your best people to engage with your customers, encourage and mentor your employees, create new business solutions, and get you into new markets. I have found that this approach is most challenging to start, but once printers do get started, they are off to the races. The start requires leadership that can explain this is not about replacing humans, it’s about optimizing humans for what they Read More… are best at. Systemization Find article at is also about relieving the PrintingNews. com/21142688 daily stress of humans. When you systemize something it becomes boring. In this case boring is very good. We systemized how we deployed software for a project that involved three different companies on three continents, which happened every six weeks. It is so boring now. Everyone follows the documented process in the order they are supposed to. Nobody has to commit anything to memory. It went from a very high stakes event to a routine event. You can do that with the processes in your print business that happen daily. Then when something weird happens, the humans have the time to apply their brains to the exceptions. ●

WhatTheyThink - Printing News | September 2020

MARKETING & TECHNOLOGY ─ Brands Should Be Good Citizens

WHAT BUYERS WANT

FROM BRANDS ...Right Now

s the U.S. economy begins to gradually reopen, marketers are wondering what consumers are thinking. Do they intend to return to shopping as normal? Are their feelings about their favorite brands changing? How do they want marketers to interact with them in these new and changing times? Influence Central, a marketing strategy firm, conducted a survey (“Brand Loyalty During the COVID-19 Crisis”) of 700 consumers in April 2020 to find out. Its conclusions? Consumers are looking for brands to be sensitive to their financial concerns, sensitive to the national pain caused by the pandemic, and willing to reach out to those in need. According to the survey: ● 88% of consumers are currently searching out cost-saving promotions. ● 86% of consumers are seeking deals. ● 83% want freebies. Consumers also want brands to be sensitive to the overall pain being felt by the nation at this time. They can do that by being extra customer-focused: ● 61% want customer support from brands. ● 58% are impressed by brands providing a necessary service. ● 55% value brands making changes to their normal business to help their consumers. Brands need to be careful about their messaging, too. Consumers are not looking for the hard sell right now: ● 58% value responsible messaging. ● 54% value charitable contributions by the brand. ● 50% of consumers value brands addressing coronavirus concerns.

What consumers don’t want to see is silence. Nearly one-third (29%) feel uncomfortable when their favorite brands remain silent during this time, and nearly all of them want their brands to take it seriously. Only 21% would welcome any type of humor Read More… or attempt at lightening the Find article at situation. PrintingNews. com/21142802 In other words, consumers want brands to be good citizens and care about their customers beyond the sale. This has always been the case, but it’s never been more important than now. So encourage your clients to be marketing, but that marketing should look and sound different than in the past. ● Heidi Tolliver-Walker has been a commercial and digital printing industry analyst, feature writer, and author for more than 20 years. Her industry commentary can be found in national printing publications, blogs, and marketing publications.

LABELS & PACKAGING ─ Packaging Trends

PACKAGING

IS CHANGING

Is it to our beneﬁt or our fault? By David Zwang

ackaging trends have been shifting since before the COVID-19 pandemic and will continue after it becomes a footnote in history, although perhaps at an accelerated pace. The real drivers for change are the rise of urban living and mega-cities and increased environmental awareness. This all means that packaging-based supply chains will continue to adapt to the growing population centers and drive packaging growth and shifts.

Who is buying? Any increase in consumer consumption will drive the continued growth of packaging. The purchasing power of the middle class is the primary driver for

increased packaging needs. As seen in the following chart, population growth and the expansion of the middle class in the emerging economic growth areas will offset the stagnant growth in the well-established economies. The global middle class is expected to grow and reach 5.3 billion by 2030, according to a recent Brookings Institute report. Some 88% of the additional middle-class population will be Asians. China and India will represent over 43.3% of the global middle class by 2030. By 2030, over 70% of China’s population could be middle class, consuming nearly $10 trillion in goods and services, and India could be the world’s largest middle-class consumer market, surpassing both China and the U.S. Middle-class spending is

expected to grow from about $37 trillion in 2017 to $64 trillion by 2030, accounting for a third of GDP growth.

What We Buy Buying habits have been changing for a while, and as a result increased product segmentation and personalization will continue to have a growing effect going forward. In 2020, many consumer products groups (CPGs) aren’t quite there, but they are starting to see that the integration of online shopping and omnichannel marketing can increase sales. According to a poll conducted by customer data platform Evergage, only 26% of U.S. marketers have their channels connected. While CPGs tend to be very conservative and move

Global Population Snapshot Population 2020

Yearly Change

Net Change

Fertility Rate

Median Age

World Share

Asia

4,641,054,775

.86%

39,683,577

2.15

59.50%

Africa

1,340,598,147

2.49%

32,533,952

4.44

17.20%

Europe

747,636,026

0.06%

453,275

1.61

9.60%

Latin America

653,962,331

0.90%

5,841,374

2.04

8.40%

North America

368,869,647

0.62%

2,268,683

1.75

4.70%

Oceania

42,677,813

1.31%

549,778

2.36

0.50%

Region

WhatTheyThink - Printing News | September 2020

toward change slowly, we can expect that companies will make great strides going forward. Consumers are most interested in personalized content related to products that interest them (50%), products based on their previous purchases or searches (43%), updates on availability or price (43%), and re-targeting related to the exact product they’re looking for (35%). As products become more personalized it will increase the need for shorter packaging run lengths.

How We Buy Global retail sales through all channels are estimated at ~$25 trillion at the end of 2019, a 4.5% increase from ~$24 trillion in 2018. Consumers worldwide spent nearly $3.76 trillion online in 2019, up from $3.63 trillion in 2018, according to Internet Retailer, a Digital Commerce 360 brand. Growth in digital sales also accounted for nearly 65.2% of all retail gains in Q4, up from 52.2% in 2018. Global digital sales are growing faster than the more

saturated U.S. e-commerce market. In that same period from 2018–19 global digital sales grew by 14%, while only by about 4% in the U.S. As consumers use the internet and increasingly mobile devices, especially after the “quick habits course” fostered by COVID-19, the move toward online shopping or “hybrid” shopping experiences like BOPIS (buy online and pickup in store) will only increase. Online shopping frequency is determined by age, with the

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LABELS & PACKAGING ─ Packaging Trends

younger generations providing the largest share. Furthermore, accelerated e-commerce adoption due to COVID-19 may be sticky as consumers avoid busy supermarkets, etc. CPGs, as most other large enterprise companies, are learning that an “agile” culture enables them to operate more efficiently, reduce waste and, most importantly, change direction quickly as demand changes. This has moved the concept of JIT (just in time) as an operational philosophy for working with suppliers into the fabric of a company’s day-to-day decision making. The inclusion of this new concept in CPG thinking is further evidenced by the 2019 McKinsey study No ordinary disruption; winning with new models in packaging 2030, which states that one of the top five priorities for the packaging industry is “handling SKU proliferation driven by consumer preferences; for example, more flexible and agile processes to manage shorter manufacturing runs, and faster new product development and time to market.” The changing market demands go beyond the packaging process itself to packaging types, repackaging and how they need to change to support the new distribution demands. It goes on to state that “as e-retailers tackle the challenges of increased shipments of individual parcels and repackaging (as a result of online

purchasing), we expect to see its applications and resultant changes to the traditional packmarket share with this model. aging conversion value chain. Additionally, the creative and For one thing, business unique packaging achieved with models requiring quicker turnflexible packaging appeals to around and flexible conversion shoppers and boosts sales. will encourage increasing use Environmental of automation. For another, it is Awareness likely that conversion will need Environmental awareness to be more localized – that is, has moved from niche discuswill be increasingly done close sion to more mainstream action. to or even in-house at brand Across the globe, governowners – where converters ments and CPGs are not only need to be nimble to offer rapid discussing global warming, air prototyping, fast turnaround, and water pollution, recycling, and new technologies such as plastic waste in the oceans and digital print.” alternative solutions but startThe use of flexible packaging to take action. The desire ing can minimize package transfor sustainable manufacturport costs between the coning processes, including the use verter, packer/filler, retailer and reuse of materials, is beginand end user. It not only takes ning to see real traction in the up less space when empty than market. Equipment manufacrigid packaging but can also be turers are developing press and constructed on the spot from finishing equipment with an eye roll materials at the filling locaon carbon neutral. Single-use tion, thereby minimizing transplastics are being outlawed by portation of ready-formed, but local and national governments empty, packaging. around the globe. Substrate Replacing rigid packaging manufacturers are starting to with even lighter-weight flexdevelop creative new ible pouches has materials based on started to occur Read More… recycled content and but is not yet wideFind article at byproduct waste, with a spread due to PrintingNews. com/21142801 goal of reuse and comcurrent low speed posting properties. on filling lines for Millennials make up about pouches compared to bottles. 30% of the global populaThis is beginning to change with tion and are currently in the the advent of more purposesweet spot of consumer spendbuilt digital production lines that ing. While environmental disinclude print, lamination, pouch cussions have been going on construction and filling. for decades, they are the first HP has been increasing

WhatTheyThink - Printing News | September 2020

generation to have grown up in a world where “climate change is part of the daily international dialogue, and have been forced to face the realities of extreme weather patterns, sea level rises, rapidly increasing GMO agriculture and species extinction,” according to the Sustainability Management School headquartered in Gland, Switzerland. They went on to reference a recent study that showed that “87% of millennials believe that companies should address urgent social and environmental issues. Early indications are that Gen Z is starting take up the mantle and continue these efforts. CPGs are addressing these issues. Leading brands including Nestlé, Amcor, ColgatePalmolive, Danone, Ecover, L’Oréal, Mars, M&S, PepsiCo, Coca-Cola, Unilever, Walmart and Werner & Mertz announced their commitment toward using “100% reusable, recyclable or compostable packaging by 2025 or earlier” at the 2018 World Economic Forum in Davos, according to the Ellen MacArthur Foundation. They went further to say that “more than 450 organizations have signed their Global Commitment to address plastic waste and pollution at its source.”

awareness. Just as these have been driven in great part by the technologies that have

connected us, the solutions are facilitated by many of those same technologies. ●

Summary The trends in packaging are a direct result of market changes and general

For more information, visit Printingnews.com/10003758

MANAGEMENT ─ “The New Normal”

NEWLY Crisis demands new agility, not a new normal. By Preston Herrin

he narrative inﬂuencers - media, academia, politicians and other institutions - have been quick to embrace a new descriptor for the effect of the worldwide pandemic: “The New Normal.” It’s a softer framework for the hyper-change that has been thrust upon us. To be sure, in the past 120 days we have been forced to change at a pace that will tire even the

Source: HBR – Executives Fail to Execute Strategy, Ron Carucci, 11/2017

most ardent agents of change. However, in a business context, there is nothing “new” or “normal” about this change. The idea of a “new normal” carries the connotation that there was an “old

WhatTheyThink - Printing News | September 2020

normal.” Nothing has been “normal” in the complexity of business change for at least several decades. Cycles are shortening, robots are intelligent, machines are learning, digital currency thrives, workforces are displaced, cars are autonomous, information is everywhere and digital collaboration is abundant. Successful businesses have been designing agile systems to proactively harness change and predict outcomes precisely because shaping the future is an enigmatic effort. The pandemic is reflective of past crises in that it demands the best of people, systems and leadership. We have all witnessed the people who run toward a calamity rather than away from it. First responders and good Samaritans run into dangerous situations with little regard for their personal safety. In reflection, they will say they are “well trained” or “wired that way.” What if you could “wire” and “train” your organization to respond to change and crisis with speed and agility reflective of

the heroes charging into danger? It takes courage for a leader to objectively assess their business delivery model and affect change. Even after the evident lessons from this current crisis and global pandemic, many organizations will continue with business-as-usual and a hopeful strategy. For the courageous, these ﬁve steps are an introduction to a process necessary to develop a purposeful, agile organization in the age of hyper-change.

business operating systems will unearth rich clues to a treasure of opportunity. Enabling real-time access to the metrics you choose to measure performance is critical to galvanizing agility.

Innovate Incessantly

Read More… Find article at PrintingNews. com/21143034

Structurally, the previous points will allow your company and team to weaponize agility, pivot quickly and outperform the market. If agility is the engine to

Assess Organizational Design People, process, technology and structure are four things foundational to sustained success. Each one should be kept in a constant state of reﬁnement, never settling for the status quo.5A

Plan from the Foundation Studies show that only 5% of employees are aware of their company’s strategy, and even managers are not able to articulate it effectively. Planning from the foundation will engage your frontline team in the creation of the plan while bolstering the support you will need to execute.

Bridge Planning to Execution Over 60% of senior executives believe their company does a poor job bridging strategy to execution. A failure to execute is inexcusable in a market chockfull of affordable software solutions that can automate and simplify this process to ensure the goals and objectives, borne out of the plan, are cascading throughout the organization. 61B

Wield the Data Sword You can’t manage what you can’t measure. The successful curation of data sources springing from your

Source: HBR – Executives Fail to Execute Strategy, Ron Carucci, 11/2017

harnessing change, then innovation is the fuel. Cultivate an environment tolerant of imperfection where the point-team can forge a new path forward. During a time of crisis, the innovators win. Leadership must take the first courageous step toward embracing new systems to future-proof their businesses. Sustained success is borne of an aligned culture and intelligent system designed to execute high-performance outcomes. It’s deliberate. It’s purposeful. It’s the agile organization that will win the future. ● Authors Note: Watch for new articles detailing specific methods for each of these five steps to creating agility in your organization.

Preston Herrin is a growth and performance consultant. He has enjoyed a successful leadership and executive management career spanning the manufacturing, e-commerce, software, and logistics sectors.

MANAGEMENT ─ Change Management

PIVOT

POINTS

Change management is an important factor in today’s HR practice. By Arnold Kahn and Dino Scalia

hese unprecedented times are driving unprecedented change throughout our lives and our businesses. It is more important now than ever before to help our employees come to terms with the changes that are required of them in order to smoothly move our businesses forward. In normal times, we use change management techniques to help employees adjust to changes driven by things like process automation due to the installation of a new MIS solution, or to prepare for a merger or acquisition, and that is still important. For many employees, it is more comfortable to “do what we’ve always done,” and change can be viewed as unhealthy, stressful and counterproductive. In the current business

WhatTheyThink - Printing News | September 2020

environment, where changing conditions are a given, managing change is critical; and that applies to talent acquisition as well as other process changes you may have underway. And as your business evolves, so do your needs for talent. Here are some factors to help you, your staff and potential staff members navigate and manage change, both professionally and personally. ● Adaptability. How adaptable are you and your business? Clearly, in a printing or packaging company, it is not possible for everyone to work remotely, but for some portion of the staff, working remotely is not only possible, but preferable in a pandemic environment. Adapting to the requirements associated with effectively utilizing remote

workers is a change that we are likely to be living with for some time. As an employer, do you see the value in some part of your staff working remotely and are you comfortable with managing remote workers? As a team member, does your job allow you to work remotely, and how do you feel about your ability to do that effectively? These are important questions to explore. ● Vision. As a business owner or manager, you probably have had a relatively clear vision of the future which has likely been upended by the pandemic, leaving uncertainty in its place. Have you taken the time to reassess this vision and shift it to adapt to current conditions? Are there things that are necessary for you to do now with the resources you have available? And as an employee or candidate, how can you help the company move this vision forward while still dealing with your own needs and those of your family? ● Risk Tolerance. Change is risky and not for the faint of heart, whether you are an employer, employee or candidate. Risk is reduced when an effective plan is in place. Both in the business and personally, now is a time to make a plan to address the changes you need to make and to have the discipline to execute that plan. Ask yourself, do you have the discipline to push forward through all of this uncertainty? ● Paradigm Shifts. Are you capable of leaving the old behind and embracing the new? In addition to the challenges of automation, digitization and competition that were already facing the industry before the pandemic, we are now required to think differently to move forward to success. Business as usual wasn’t a winning strategy before the pandemic, and it certainly isn’t now! A couple of examples of how others have navigated change in this difficult time will demonstrate these principles. ● A company invested heavily in equipment and processes to expand its POP

production capacity to Read More… meet growing demand. Find article at Almost overnight, demand PrintingNews. for POP dwindled as cuscom/21142806 tomers faced their own unforeseen change. The printer used existing equipment to produce face mask and shields, but this was only a temporary solution as PPE specialists geared up their own manufacturing and importing. They pivoted to producing directional signage to foster social distancing, including floor signage, outdoor signage, wall coverings and other products customers need to safely conduct business. To make this pivot successful, talent had to be evaluated and people with different skill sets were needed. ● A candidate, who held an inside position as an account manager with a significant number of relationships within a certain vertical, was looking for something different but had difficulty seeing her way there. Concurrently, a printer who served the same vertical was eight states away and desperately seeking someone with connections in that vertical. The two connected and that led to a hire but required managing change for both parties. The company never envisioned a remote salesperson, and the candidate never perceived herself as a salesperson. They both adapted for a successful relationship. Change is difficult, but by adopting proven change management techniques, it can be navigated successfully! ● Arnold Kahn, a respected authority on staffing issues for the graphic arts industry. He has owned and managed printing and prepress companies for over 25 years. In 1994, Arnold formed PrintLink to successfully help candidates and hiring managers find each other.

Dino Scalia is the senior vice president, managing partner at PrintLink. He has spent over 30 years in the Printing Industry. He has lead cross functional teams in sales, business development, and account management serving the enterprise account marketplace.

...

PRINTING INDUSTRY NEWS ─ News Trending On Printingnews.com

Heidelberg Makes Financial Moves to Aid Stabilization and Transformation Heidelberg is setting the next milestone in its ongoing financial stabilization and transformation process. The company announced today that it will pay back the remaining amount of € 150 million on the existing high-yield bond, which has a term to maturity until 2022 and a coupon of 8 % p.a., plus accrued interest before maturity, i.e. on Sep 9, 2020. The payback will be funded from cash reserves and will unburden the financial result by approx. € 12 million per year. After the transfer of € 380 million in funds to the company from Heidelberg Pension-Trust e.V. in March this year for the purpose of refinancing and t ransformation, and the sale of the Gallus Group at the end of July 2020, Heidelberg will make the announced early repayment of the high-yield bond without delay. www.printingnews.com/21142746

New EFI Engage Conference in 2021 to Deliver World-Class Print and Packaging Education Program Building on the continuing success of its recent webinar and online training series for print and packaging professionals, Electronics For Imaging, Inc. will offer an expansive, new EFI Engage Conference online next January that gives customers tangible, actionable insights on how they can increase efficiency, improve performance, and capture new market opportunities. Sessions will cover a broad range of technologies, offering world-class instruction on EFI Productivity Suite MIS/ERP, EFI Fiery digital front end and EFI Display Graphics and Corrugated inkjet printing solutions. In addition to continuing EFI’s strong tradition of in-depth print training, the new virtual conference will also provide the company’s most intensive packaging training yet, with in-depth instruction on integrated workflow automation for corrugated and flexible packaging, labels and folding cartons. The event will leverage the strong content offering EFI has excelled at providing in the 20+ year history of its Connect conference. www.printingnews.com/21142411

Xaar Appoints Chuck Pemble as Business Development Manager for the Americas Xaar announces that Chuck Pemble has joined the company as Business Development Manager for the Americas. Based in the Boston area, Pemble will be responsible for building and growing OEM and integration channels in Americas that deliver a range of digital print solutions leveraging Xaar’s piezo printhead technology. Pemble will utilize Xaar’s current and future technology portfolio and partnerships to expand into new strategic markets and applications where Xaar’s technology has signiﬁcant advantages. Pemble has been in sales and business development for over thirty years. www.printingnews.com/21142524

L+L Printers adopts new HP Indigo 15K Digital Press technology L+L Printers, a West Coast commercial printer, has adopted new HP Indigo 15K Digital Press technology to expand digital possibilities with an extended range of applications, including specialty packaging opportunities. L+L Digital will be taking advantage of new HP Indigo 15K features such as extended support for thick substrates to target high-growth segments such as digitally printed packaging, as well as image quality advancements for offsetmatching quality print. The 60-year-old commercial printer adopted HP Indigo digital printing in 2006, providing innovative print to a strong clientele of advertising agencies and marketing departments. L+L has evolved its digital operations with the Indigo 5000 series, 7000 series, 10000 series, and now 15K. The HP Indigo 15K Digital Press brings higher offset digital print quality and wider versatility with a substrate range up to 24 pt, enabling virtually endless substrate types including paperboard, black and colored, synthetics, and metalized. www.printingnews.com/21142752

WhatTheyThink - Printing News | September 2020

RMGT Launches New 8-UP+ Size 970 Series Offset Press RMGT has announced the launch of the RMGT 970 offset press. The 970 is the newest member to the RMGT 9 Series family of presses that boasts over 80 new installations in North America over the last 6 years. This game changing new press further consolidates RMGT’s strength in the 8-up market sector that was created in 2005 with the introduction of the Ryobi 920 press. The new 8-UP+ (25” x 38”) RMGT 970 was set to debut as part of RMGT’s Assisting Your Potential drupa exhibition along with significant enhancements to the RMGT 10 Series press capabilities. Over 80% of RMGT 9 Series presses running in North America are manned with a single pressman. Based on the rapid growth and great profitability that these companies have experienced this approach has been successful in over 1,300 shops worldwide. The ability to staff a highly automated RMGT 8-UP press with a single pressman was important for profitability and flexibility prior to March of 2020, but as the printing industry recovers from the economic results of COVID-19 reducing per shift staffing costs will bring greater viability to pressrooms who take the 9 Series approach to manufacturing. www.printingnews.com/21142796

RIP Chuck Gehman We are saddened to report the passing of long-time industry innovator, supporter, and friend to many of us. According to his wife, Jamie Budge Gehman, Chuck passed away following a valiant battle with a rare esophageal cancer. She said, “What helped propel him was to not to focus on his diagnosis, rather to embrace the beauty of everyday life. Spending time with his loved ones, working on his book, going to Crossﬁt when he could, and so many more simple daily pleasures were things that brought him normalcy and comfort during his ﬁght.” Following a stint at Agfa, Chuck launched off on an independent career with the founding of Irongate Networks, an e-commerce company. He joined Digital Art Exchange, Inc. (DAX) to build out the company’s Internet and application services to the graphic communications industry. He joined Printable in 2000 as CTO. While at DAX he was involved with the launch of PrintPlanet. His ready smile, can-do attitude, and innovative spirit will be missed by his many, many friends within and outside the industry. www.printingnews.com/21142756

Kernow North America Takes over Mohawk Digital Synthetics Product Line Kernow North America has announced that they will be taking over the Mohawk Digital Synthetic product line. Under the agreement, Kernow North America will begin manufacturing and supplying distribution customers of Mohawk Digital Synthetics with the full range of KernowPrint, KernowPrint Pro, and KernowPrint Pro-Lite synthetic papers directly. In addition, Kernow will be expanding their offering to include a new range of printable ﬁlms. www.printingnews.com/21142843

Graphic Communications Workforce Coalition Releases White Paper on Workforce Concerns in Graphic Communications The Graphic Communications Workforce Coalition (GCWC) has completed a comprehensive survey of the industry and released a white paper detailing results and recommended actions. The paper, titled “Workforce Concerns in Graphic Communications” was a direct result of an industry survey taken earlier this year. The respondents covered all areas of the industry including service providers, suppliers, associations, and schools. The paper was researched and written by Donna Painter (Millersville University), Steve Bonoff (Printing Industry Midwest), Jeff Peterson (Foil & Special Effects Association) and Justin Egresitz (Millersville University. The paper includes a summary of the ﬁndings as well as a key section on how organizations can be a part of the solution. This includes several recommendations for actions that can be taken by companies, organizations and schools. www.printingnews.com/21142755

MANAGEMENT ─ Reviewing Business Practices

TAKE ACTION NOW TO

SURVIVE THE

FUTURE

Many printers are now reviewing their business practices as they deal with what they have learned from the lockdown. By John Giles

rinters must have a strong current ratio and money in the bank if they are going to survive a major disaster like COVID-19. Those who were living off their cashflow are finding it difficult to get the economic engine started again. If experts are to be believed, there is a chance that the virus could revive this winter, and they’ll have to learn how they can become financially stable to ride out another stay-at-home order in the future.

Keep Your Accounts Receivable Current Too often, printers extend credit to companies that don’t have a good history of paying quickly or fail to extend credit correctly. Even if some companies will eventually pay, they may string you on for months before you see the money. Printers must review their accounts Read More… receivable regularly and Find article at immediately contact those PrintingNews. companies in arrears. Printers com/21139733 who had allowed customers more than 60 days of credit may not be able to collect their money fast enough to avoid having to shut down themselves. Even if your shop is closed, you must get on the phone and start asking for your money.

Increase Your Internet Bandwidth COVID-19 has shown businesses and the public how important video conferencing can be, especially with the new social distancing. This means customers will want to continue to communicate via video in both business and personal situations. More of your employees will need access to video conferencing and this will suck up your bandwidth. Bandwidth measures how much data can be uploaded or downloaded in a second. The bandwidth covers your entire network, so if two people are downloading files at the same time, the download speed is halved for each of them. Between the file sharing and the need for video conference, printers will have to increase their bandwidths in the coming months. Your internet speed will be an important tool as more commerce transactions move online. Printers must install video conferencing tools on more computers. Salespeople, customer service representatives, the prepress department staff, graphic designers and the bookkeeper will all need to be able to video conference. Whether it is discussing a past due account, making a sales call or proofing a file, everyone in the shop who usually interfaces with customers will start doing it online. This means each computer needs a camera, a

WhatTheyThink - Printing News | September 2020

headset, connection to high-speed internet and proper conferencing software. The two biggest video conference providers for the business world are Gotomeeting and Zoom. Using these tools will become as common as knowing how to make a telephone call. Printers must have a fully functional website that offers online ordering and customer portals. Printers who already were using online ordering tools are two or three steps ahead of their competition as businesses begin to reopen. Like video conferencing, the advantages of e-commerce were reinforced during the virus crisis. Many printers already have the online tools available because they are included in popular printer websites. Websitesforprinters. com, PrinterPresence, MyOrderDesk, DocketManager and EFI MarketDirect storefronts dominate the small commercial and quick printer market so most printers can switch on the services quickly.

Sadly, some printers only use their storefronts as an online landing page. Customers are going to demand more online ordering, and printers will have to provide it or see sales growth slide. The COVID-19 pandemic is forcing the world to change quickly. Printers wonâ&#x20AC;&#x2122;t have the luxury of waiting to see whatâ&#x20AC;&#x2122;s going to happen. They must start getting business as quickly as possible and make up for the weeks of sale losses. To survive, it will take fast action on the part of print owners to adjust to the new post-virus economy. Luckily, most practices are already available to deal with the new dynamics. Printers just must start using them. â&#x2014;?

John Giles is a consultant for the printing industry who works with Tom Crouser and CPrint International to help printers prosper. Contact John at (954) 224-1942, john@cprint.com, or johng247@aol.com.

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WhatTheyThink - Printing News | September 2020

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WIDE-FORMAT & SIGNAGE ─ Environmental Graphics

A CHANGING

ENVIRONMENT Environmental graphics evolve with the pandemic. By Richard Romano

have written often in the past several years about “environmental graphics,” also known as “experiential graphics,” which can best be thought of as the intersection of signage and décor, comprising such print applications as interior wall graphics, window graphics (both outdoor-facing as well as interior windows like conference rooms and offices), wayfinding, decorative accents like graphics applied to elevator doors, and, basically, graphics added to virtually any surface. This had been a fast-growing application area for signmakers and display graphics producers, as the wave of new construction over the past several years meant that there were many new office spaces awaiting décor. Well, that, as they say, was then. As I report elsewhere in this issue (see “ISA Quarterly Economic Report Forecasts Long Road to Recovery” on page 48), new construction has slowed down since the pandemic—not everywhere, but in aggregate. At the same time, work-from-home remains a reality for employees who can make their home office work. As a result, the virus has spawned some big changes in the types of, and requirements for, environmental graphics. Some we have already started to see, and some may be on the rise.

Going down? HP and 3M have collaborated to offer design templates for a variety of social distancing signage and graphics—including elevator floor graphics. (Image courtesy HP)

Keep Your Distance One new variant of environmental graphics that I have written often about in the past

WhatTheyThink - Wide-Format&Signage | September 2020

Privacy is an important aspect of a successful home office. In this case, interior window film from Mactac (specifically IMAGin B-free Frosted Window Films were used to set off the living room-based office from the rest of the home. (Image courtesy Mactac)

couple of months is safety and distancing signage. If you have been out in the world recently, you know that retail locations have been busy installing floor and wall graphics indicating six-foot distancing intervals, instructions on mask use, and the like. Other types of spaces like offices have been installing similar kinds of safety and distancing signage, especially in elevators and other public spaces. And even apartment complexes and other multi-family homes and communities have needed these kinds of graphics (see “Benson Creates W2P Store for COVID Signage and Safety Materials” on page 44).

The Home Office That Decorates A few years ago, my erstwhile co-author Dr. Joe Webb and I published a guide to working at home called “The Home Office That Works!” (we were several years ahead of our time). One of our practical tips for a productive home office is to make the office its own discrete location separated from the rest of one’s home. It could be a spare room, a finished basement, a converted attic, or even a partitioned portion of another room, such as a living room or den. It was with this in mind that I was interested to see a recent case study from Mactac that described a project whereby a customer wanted to use a variety of environmental graphics

to partition off a living room-based home office. The M.O. for this was to install window films over interior doors. The client went through Kitchen Concepts, a kitchen and bath design and remodeling company, who in turn partnered with The Visual Edge Signs & Design. (A unique aspect of environmental graphics compared to other forms of printing an graphics is that this work often comes through archiRead More… tectural, interior design, and Find article at PrintingNews. other kinds of similar businesses com/21142824 rather than traditional printbuying routes.) In the “Before Times,” there had been a slight, barely detectable trend for environmental graphics to move into the residential space, but if home offices become a permanent way of doing business— even part-time—home environmental graphics may also become a substantial niche application, if only to create more compelling Zoom backgrounds.

Divisional Graphics A new term that has arisen during COVID is “divisional graphics” (the term has actually been trademarked by EFI—see sidebar). Also referred to by the less appealing term “germ shields,” divisional graphics refers to printing on plastic or other materials that are used to physically separate people. Think of the plastic screens at checkout counters, desk dividers and the like. Sure, these items can be purchased unadorned, but

“Divisional graphics” can take many forms, such as these tall “mobile germ shields” designed for places like gyms. They can be used as is, or decorated with branding or other printing. (Image courtesy Benson Integrated Marketing Solutions)

WIDE-FORMAT & SIGNAGE ─ Environmental Graphics US-based grand format print shop Color Gamut Digital Imaging (CGDI) LLC pivoted its production line from trade show graphics to PPE in response to the COVID-19 pandemic. The shop produces shields for essential and frontline workers. (Images courtesy EFI)

New Environments

as with other kinds of COVID-related signage, these items can be an essential part of branding by adding custom printing to them. (If you Google “germ shields,” Curad antiseptic bandages dominate the top hits, so we obviously either need a better term or to hijack Curad’s SEO. And for decades, salad bars utilized what were called “sneeze guards,” a term seemingly designed to kill one’s appetite.)

A year ago, we had scarcely heard any of these terms— “safety signage” usually referred to OSHA signage posted around manufacturing plants to prevent injuries, and “distancing signage” was unheard of. Looking back at the past six to eight months, it is amazing how quickly sign and display graphics, and sign and display graphics providers, transitioned to these new applications. It will be interesting to see how they evolve in the months—and maybe years— to come. ●

Richard Romano has been writing about the graphic communications industry for 20 years. He is an industry analyst and author or coauthor of more than half a dozen books.

THE GREAT DIVIDE A new subset of environmental graphics that has always existed to some extent, in function if not in form, has taken on greater importance these days. It is what EFI is calling—and has trademarked—Divisional Graphics. “Divisional Graphics are structural or decorative graphics intended to separate people in common areas like restaurants, lounges, queue lines, bars, stores, etc., and assist in preventing the spread of contagions,” said Ken Hanulec, VP, WW Marketing, EFI. “They include the barriers and dividers that we are accustomed to now seeing at checkout counters, and plastic sheets at bars and dividing stations at hair salons to name just a few.” EFI has also identified other terms for new print opportunities that have

emerged in the wake of COVID, including “distancing graphics”—which I discussed in the main article—and “SafeGuard Graphics,” defined as “short-term print items such as menus, hotel room signage, tabletop stands, etc. that will typically be recycled or disposed of after a single use. “Trademarking the terms helps in establishing some uniformity and consistency about what is meant by each term and the specific types of applications customers are producing,” Hanulec said. “It creates some common-ground terminology in the industry when our customers are talking about creating barriers or floor graphics, for example. We are already seeing a number of

WhatTheyThink - Wide-Format&Signage | September 2020

Continued on page 61

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WIDE-FORMAT & SIGNAGE ─ Signs During A Pandemic

BUILD A MORE CONNECTED

COMMUNITY DURING A PANDEMIC

Sign companies have had to quickly adapt to provide more relevant signs for the ever-changing situation. By FASTSIGNS International, Inc.

ommunities are built and strengthened by members and residents, and those members are linked by the experiences they share. Whether participating in the simple day-to-day routine of the community or working together to improve quality of life, all of these experiences are created, enhanced or reflected by signs and graphics. Throughout the pandemic, sign companies have had to quickly adapt to provide more relevant signs for the ever-changing situation. Signs continue to assist us in

WhatTheyThink - Wide-Format&Signage | September 2020

our everyday lives as we try our best to slowly get back to business. “Our FASTSIGNS centers quickly adjusted their business models to provide everything from COVID-19 and social distancing signs to safety screens and shields to PPE across all industries. We’re fortunate to have a business model that allows our franchisees to be nimble and respond quickly to whatever their communities need the most,” said Catherine Monson, CEO at FASTSIGNS International, Inc. and Chair of the International Franchising Association, the organization that has assisted with the

crafting of the COVID-19 relief bills and the CARES ACT, to support small business owners during the pandemic. Here are three areas that signs and graphics help to actively strengthen and build communities.

Communicating Health and Safety Information Communication through signage provides what’s top of mind - staying informed and safe. From building access details and policy requirements, the messages that are shared through these signs help enhance the community’s goal to protect its members. Safety and policy signs found at community parks, supermarkets, churches, schools and businesses can communicate how the community is incorporating mandates and executive orders. Custom face masks created for businesses can also show adherence to safety regulations and build customer confidence. Elevator graphics that display maximum capacity, posters about how to protect against the virus and hand sanitizer stations further inform the community about health and safety practices. As one of the hardest hit industries, restaurants have had to update quickly by employing sidewalk signs, easy-to-move A-frame signs and eye-catching window graphics to let the community know they are open and how to safely access their business. Yard signs and banners

assist business owners as they stay afloat and communicate effectively with their patrons. Protective gear, such as acrylic guards and other clear plastic substrates, continue to be implemented across hospitals, schools, post offices, gyms, salons and more. From tables to grocery stores checkout lines, and school classrooms to cabs, the community is strengthened as each industry does its part to adjust.

Protecting and Guiding the Community Within a community’s infrastructure that’s necessary for operation, signs act as informers

to share important messages, guiding citizens to safety. A city’s infrastructure relies on a shared understanding of certain messaging. In addition to wellknown markers such as stop signs, a myriad of other community signs provide the structure for daily life such as those that identify restrooms, disabled parking and caution zones. Regulatory signs are present everywhere. ADA signs – including room signs, exit signs, elevator signs and more – must present the same information to every person regardless of physical limitations. These are the unsung heroes of signage, and their sole function

WIDE-FORMAT & SIGNAGE ─ Signs During A Pandemic is to protect each and every citizen in the community. Infrastructure signs offer convenience and promote cooperation through wayfinding. When adequately positioned on the streets and in the hallways of communities, they inform residents of their whereabouts and direct them to their destination. Permanent wayfinding signs are specifically designed to seamlessly fit within their surroundings -- creating a functional and attractive tool for the good of the community. In the current climate, temporary signs have come alongside more permanent infrastructure signs for an additional layer of assistance. Wayfinding signs help community members maintain social distance with floor graphics as reminders anywhere that people stand or potentially gather.

Encouraging Connection and Participation Communicating a message and gaining participation is a critical component in a community,

and signs provide the avenue to do this. The organization of a community can take place virtually anywhere but without active members, a community can struggle with cohesiveness. Despite the distance, people have learned how to encourage connection despite the need to maintain social distance. From celebration signs for special occasions to inspirational signs, community members have learned to ﬁnd new ways of strengthening those bonds. Giveback initiatives provide a way for community members to help, thus building a more connected community. Posters, banners, yard signs and vehicle graphics can be placed in high-visibility areas to spread awareness or show support of a cause or group. Signs help get the word out about events connecting the community. Without proper publicRead More… ity or organization, commuFind article at nity initiatives fail to gather PrintingNews. com/21142810 the momentum needed for success. A coordinated signage strategy is an effective way to build not only awareness and enthusiasm but also active engagement.

Signs to Inform, Protect and Connect In today’s unprecedented world, having a sense of community is more important than ever before to our success, safety and overall happiness and well-being. The next time you get out of the house, take a look around to observe how your community is incorporating a visual communication strategy to strengthen and connect its citizens. ●

WhatTheyThink - Wide-Format&Signage | September 2020

...

WIDE-FORMAT & SIGNAGE INDUSTRY NEWS

Creative 3D Technologies Announces Launch, First Product & Raising Funds Ethan Baehrend, 19, Founder and CEO of Creative 3D Technologies announces the launch of his company and its first completed product, Duo, a powerful all-in-one 3D printing solution, merging specialty printing styles from multiple types of 3D printers into one. With Duo, Baehrend and Creative 3D Technologies aim to significantly improve accessibility to high-performance 3d printing technology through Duo’s vast array of features. Priced at $8,800, Duo is significantly less expensive than similar volume printers while offering more features, reliability, usability, and printing capabilities that other underwhelming and function limited 3D printers don’t. Creative 3D Technologies takes a unique approach to production, utilizing custom production tools and their own products to create printers. Early funding is the company’s greatest barrier to entry due to in-house production setup costs, but the benefits of this approach are immense and immediate, making their model very efficient while enabling constant product improvement, continuous stress testing, and high levels of quality control. www.printingnews.com/21142597

Nekoosa Adds High-Peel Removable Options to Wall Graphics Portfolio Nekoosa has added three new SKUs with two varying adhesive systems to the Wall Graphics offering - an expanded microsphere removable, now in gloss white and a new, high-peel removable. Nekoosa’s Wall Graphics product portfolio is a comprehensive offering of repositionable, removable vinyl ﬁlms for a wide range wall applications. Microsphere Removable – Best suited for application surfaces like smooth, ﬂat painted walls, wall paper, wood paneling, polished stone, glass and stainless steel. Available in 4, 6 and 8 mil vinyl facestock options rated for up to one year of outdoor use. www.printingnews.com/21142653

Tracer Releases New Online Express Solutions Large Format Lenticular System

EFI Pro 30f Printers Change the Game for AJJ Enterprises’ Cornhole Board Business

Tracer Imaging is officially launching its new webbased interface for large format lenticular prints, the result of a multi-year development project that revolutionizes the way clients can order custom lenticular prints. The Express Solutions interface allows users to quickly and easily upload their own images to create a lenticular print using several of the most popular lenticular effects (Flip, Zoom or Flip/Zoom). The simple and intuitive process allows anyone, even those without a design background, to create and order their own, unique lenticular print in 10 minutes or less! The extremely userfriendly Express Solutions builder provides clear, step by step instructions for uploading files, with detailed file requirements needed to yield an exceptional final print. Express Solutions’ automated process allows customers access to high-quality lenticular prints at a significantly lower cost.

After a successful beta run with the first EFI Pro 30f printer from EFI, cornhole board manufacturer AJJ Enterprises has purchased a second Pro 30f from authorized EFI inkjet reseller partner Nazdar SourceOne to meet increased consumer demand. The Cincinnati-based company installed its newest LED inkjet flatbed printer in June. With the pair of Pro 30f printers, AJJ Enterprises has brought about a 7x increase in throughput compared with the roll-to-roll vinyl and UV inkjet flatbed printers the company used previously. The EFI Pro 30f printer’s direct-to-substrate production capabilities on items up to 4 inches (10 cm) thick can save crucial time, labor and production costs. Print customers were asking for a larger flatbed size, capability for thicker media production, wider application possibilities, and better price points, and EFI delivered with the Pro 30f. The LED flatbed printer has a maximum printable area of 120 inches x 80 inches (3.05 m x 2.04 m) with bleed printing.

www.printingnews.com/21142903

www.printingnews.com/21142659

WIDE-FORMAT & SIGNAGE ─ W2P Store

SMART STORES

Benson creates a W2P store for COVID signage and safety materials. By Richard Romano

enson Integrated Marketing Solutions serves a very specific niche: owners, operators and developers of multifamily residences—apartment buildings, communities and so on. Individual customers have their own unique smart stores, through which they can customize and purchase their own branded print products for residents and employees. “The most profitable work you can do is web-toprint work,” said Brian Benson, founder and CEO of Benson Integrated Marketing Solutions. “About 80% of our orders come through the storefronts, and about 20% are what we call ‘offline.’” Founded in 1992 and based in Alpharetta,

Benson offers seven categories of products and services to customers. “Print” includes small-format Indigo-based digital printing, as well as wide-format flatbed applications. “Signs” includes LED-lit monument signs, building signs, wayfinding, etc. “Apparel” includes embroidered clothing for apartment building staff, as well as a safety shoe line and a pant-hemming program. “Promo” includes promotional bags, umbrellas, awards, move-in kits, pens, key chains and other decorated three-dimensional objects that fall into the ad specialties category. “And then we have our Express platform, which is our digital platform,” Benson said. Based on EFI’s Direct Smile, Benson Express lets customers quickly and easily design, customize and share marketing communications and other materials using professional templates that have been developed specifically for the apartment industry. “It’s one thing to build a smart store that’s a B2B platform like Shutterfly, but what we’re really focused on is trying to replicate that environment but is highly customized for each customer,” Benson Monument sign for Park Aire Apartments. said. “So every one of our 54 stores that we Ga., Benson’s core business is building what the have is uniquely different.” company refers to as “smart stores.” Benson is constantly launching new products, “We define smart stores as [online] stores which then need to be added to the individual that really can take work from the web to true online stores. web-to-print,” Benson said. “Certainly there are “We use our system to create the workflow,” said a lot of large players, such as the Vistaprints and Courtney Sumners, COO of Benson. “Once we have Shutterflys and other companies that do it really the artwork approved, the team goes into an interwell. We tried to replicate that in the multi-family nal store using [EFI’s] MarketDirect StoreFront to space to the best of our ability.” submit the request. To add it to the storefront it

WhatTheyThinkk - Wide-Format&Signage | September 2020

Benson produces customized apparel—such as branded shirts, hats, service bibs, etc.— and has also launched COVID clothing.

goes into a queue for our technology team.” Most products go live within 24 hours. Since most customers have their own Benson B2B sites, product development is one-on-one and no two sites are exactly the same. “A lot of what we like to sell to our clients is the ability to personalize or customize all their products to their specific brand or their property’s brand,” Sumners said. “In most cases, it’s oneto-one because Location A is not going to want to use Location B’s colors or content. We don’t share many products across storefronts—outside of the COVID products.” During the pandemic, Benson developed a set of COVID-specific products and launched its first foray into business-to-consumer (B2C) webstores with a public COVID product store. “We had never built a B2C site before,” Benson said. “The COVID site is a true B2C walk-up site,

but that’s not what we’ve historically done. We’ve traditionally built very custom B2B sites.” The new site broadens the potential base of customers, but their core business remains committed to the multi-family market. Benson’s narrow vertical has unique challenges in the age of COVID. “Our COVID business is obviously significant for this particular vertical because they’re trying to reopen and they’ve got a lot of communication needs,” Benson said. “For a multi-family operator, you’ve got to communicate not just with your employees, but with residents. They’ve got hundreds of thousands or millions of residents, and 15–20,000 employees. They’ve got their work cut out for them, so what we’ve tried to do is take our expertise and market and deploy that through the stores so they can act.” As an example, JLL, a large commercial real estate

WIDE-FORMAT & SIGNAGE ─ W2P Store

Pages from Benson Integrated Marketing’s COVID-19 Business Tools Guidebook for customers.

firm, offers a guidebook called “(re)entry” for businesses to start bringing employees back to work. “They’ve got doctors from Harvard and all these great publications on how a property owner or business owner might reopen post-COVID,” Benson said. “From my standpoint, what’s missing, at least for our customers, is once you have a Benson launched strategy, how are you going to a business-toorder all the COVID-related consumer site for its

materials? How are you going to produce it all? How are you going to know who ordered it and who didn’t? That’s what we’re leveraging the EFI platform to help us do for our customers.” Benson has launched its own 46-page PDF

COVID-19 products.

WhatTheyThinkk - Wide-Format&Signage | September 2020

guidebook with reopening strategies and associated products. Necessity, they say, is the mother of invention, and the COVID store came together quickly once the pandemic was in full force. “When COVID hit, we saw a significant decline in our day-to-day business,” Benson said, “and we had Desk/counter germ shield. two choices: sit around and wait for the recovery or find a way to be in the new ‘market space,’ so to speak. So we created the entire COVID marketing playbook/product line in probably a five-day period.” Demand has spiked for COVID-related products, specifically PPE like germ shields, masks and gloves. “We created multiple, custom germ shield options that were designed specifically for our vertical end users,” Benson said. “We’ve got a mobile germ shield that’s indoor/outdoor, we’ve got desk germ shields, made-to-measure germ shields and a lot of products like that.” And signage. Lots of signage. “In the last 30 days, we’ve had more than 50,000 signs ordered through our storefront,” Benson said. “We’re having to change all the occupancy rates for common spaces, so there’s a lot of signage updates. There’s a lot of elevator occupancy signs, office occupancy signs, gym occupancy signs, new pool and gym rules and how to schedule virtual and selfguided tours.” Be it B2B or B2C, Benson was an early adopter of web-to-print and the smart store concept, and not solely for technology’s sake, but because it pays off. “What we’ve seen as a company is that the teams that are processing online work can create double the revenue of a team of customer service representatives working in an offline environment,” Benson said. Interestingly enough, the same thing is happening with Benson’s clients. “We’re seeing customers truly embrace the smart store and really utilize it,” he added. “They’re

able to reduce their marketing staff as well, and refocus them on more important initiatives.” It is also a testament to the skills of Sumners and her team—and their close relationship with EFI—that the COVID B2C site was launched so quickly. “It’s definitely to Courtney and the way Benson has embraced and utilized this technology in their operation,” said Charlotte Tueckmantel, GM, Webto-print & Value Added Products, EFI. “They’ve got a dedicated team who really live and breathe the technology and made the decision years ago that the technology has an equal place in their strategy.” Benson is trying to accelerate to same-day turnaround, and MarketDirect StoreFront is vital to that effort. “We have embraced the technology because we believe it’s the only path to get the same-day turn time,” Benson said. A lot of the rush of work is likely temporary, but given the variable state of reopenings around the country, it tends to come in waves depending on where a particular state or region is in its reopening. Benson also has customers who own and manage commercial or office sites, as well as residential. “Right now, we’re focused on reopening properties, but our next wave of efforts is going to be related to opening what I call offices,” Benson said. “Very few Read More… if any of our customers has even Find article at looked at their corporate office PrintingNews. com/21142815 space yet—they’ve been highly focused on their communities.” As a result, Benson has been talking with major real estate groups about their COVID re-entry need for office and commercial spaces. “That’s kind of what we’re shifting gears to now,” he said. ●

WIDE-FORMAT & SIGNAGE ─ State Of The Sign Industry

ISA QUARTERLY

ECONOMIC REPORT It's a long road to recovery. By Richard Romano

On July 22, the International economy is again beyond full employment Sign Association (ISA) hosted with inflation moving briefly above the Fed’s a Q2 2020 economic webinar 2% objective. Old and new credit facilities are that looked at the current state fully utilized in 2020, and prove effective. of the sign industry, and offered ● The forecast reflects the four federal stimua general macroeconomic short and long view. lus packages enacted so far this year. These The webinar was based on the ISA Sign Industry indirectly provide over $3 trillion (annual Quarterly Economic Report and was presented by rate) of income support in the middle two Shane Norton and Leslie Levesque, director and quarters of 2020, although this support associate director, respectively, of IHS Markit, fades rapidly by 2021. that produced the report. The report was spon● Facing a cyclical shortfall in revenues, state sored by the National Association of Sign Supply and local governments restrain spending Distributors (NASSD). through 2022 sufficiently to prevent the rise The sign industry doesn’t exist in a vacuum, so of state and local deficits as a share of GDP. the session began by providing some macroeco● The United States-Mexico-Canada nomic context much of which, unless you have been Agreement (USMCA) takes effect in July. The trapped in an underwater pyramid for the past year, forecast includes tariffs enacted by the U.S. you are already pretty familiar with. The macroand China since 2017 and still in effect. economic assumptions underlying the sign industry ● The price of Brent crude plunged to $29 per forecast are: barrel in the second quarter. The Brent oil ● The spread of the COVID-19 virus peaks price gradually recovers, reaching $50 per over the summer, with localized recurrences barrel by late 2021. possible. There is no effective and widely-available vaccine until late 2021. Lockdowns continue to be eased gradually over the summer and autumn of this year. ● The Fed maintains the federal funds rate near 0% until Figure 1. US economic growth by sector. late 2026 when the

WhatTheyThink - Wide-Format&Signage | September 2020

Markit based its estimates is from May 2020. On the supply side, 2020 is decidedly bucking the historical trend (see Figure 3). “[Until after 2021] it’s not likely any aspect of this segment will see a total rebound to 2018 levels,” Levesque said. Figure 2. Leisure & hospitality accounted for 38% of job losses in March and April, and 47% of job gains in May and June.

They also broke down overall U.S. economic growth by sector (see Figure 1). Their report was done before the BEA announced that Q2 GDP fell off a cliff, but their Q2 forecast was pretty close. They also identified which sectors of the economy experienced the worst job losses (see Figure 2):

Figure 3. Supply Side Printed/Constructed Signage Index (Source: IHS Markit)

Sign Industry Outlook—Supply Side They divided the sign industry into print and electronic/digital, the latter of which had been growing, and the former of which had been seeing slight declines even before COVID. By “supply side,” they are referring to the industries that supply components used in sign manufacturing, including wood, paper and printing; metals; plastics; and other machinery manufacturing. The IHS Markit Printed Signage Index is based on a given year’s comparison to the historical trend. According to a methodological footnote in the Quarterly Economic Report on which the webinar was based: “A value of ‘0’ represents an expectation of industry growth right in line with the historical trend. Positive values represent stronger than average growth. Negative values represent below average growth. The QER figures were revised based on new historical data to provide a true comparison point for the new index values.” According to Levesque, the most recent data on which IHS

It won’t be until 2022 that growth in the printed sign index, at least on the supply side, rebounds significantly. Levesque also added that a lot of this was due to issues with manufacturing and inventories that had been bubbling below the surface as far back as 2019 and which the pandemic only exacerbated. “The two keys to the manufacturing outlook are fixed investment and inventories,” Levesque said. “Both react badly to recessions. When sales fall, a run down in inventories follows.” On the supply side of the digital/electronic signage front, the past three years had been performing better than printed signage (see Figure 4). “Business fixed investment is expected to fall 10.3% this year before turning up to 1.3% and 4.8% growth in 2021 and 2022,” according to the forecast. “The decline this year consists of large declines in equipment spending (13.3%) and business structures (17.5%) and a smaller drop in intellectual property products (2.1%), which is typically less cyclical than the total.”

WIDE-FORMAT & SIGNAGE ─ State Of The Sign Industry attributed to less of a need for brick-and-mortar retail spaces as the retail industry undergoes changes and shifts toward e-commerce activity,” according to the forecast. Again, the pandemic only accelerated trends that had already been well-established. “Spending on construction of healthcare facilities is expected to increase at a 1.5% CAGR,” the report added. “During this fiveFigure 4. Supply Side Electronic/Digital Signage Index (Source: IHS Markit) year period, growth will be strongest in the public segment, rising an average of 3.8% annually.” Then there was the slowdown in business and leisure travel, which they expect to persist. This is reflected in the end use index for static signage in the architectural market (see Figure 6). “Spending on infrastructure construction is expected to plummet in 2020, falling 12.0% because of delays and cancelFigure 5. End Use Electronic/Digital Signage Index (Source: IHS Markit) lation of projects during the End Use Markets COVID-19 pandemic,” according to the forecast. “The IHS Markit then looked at the end use markets, highway/streets and transportation components will which reflects the “demand” side of the supply-and-demand equation— these are industries/markets that buy signage, be it digital or static (that is, printed/constructed). In terms of electronic/digital signage, they attribute the drop in 2020 (see Figure 5) to a decline in construction spending overall, which is perhaps one of the biggest drivers of signage. When construction slows down, demand for signage correspondingly drops. “This stretch of lower retail Figure 6. End Use Architectural Signage Index (Source: IHS Markit) construction spending can be

WhatTheyThink - Wide-Format&Signage | September 2020