New Research: Expansion into New Printing Segments by Packaging Printers Growing

Convergence in the Print industry—the process by which print segments come together through print service providers (PSPs) expanding into segments beyond their primary segment—is a phenomenon that has been occurring for many years.

In 2018, NAPCO Research and PRINTING United Alliance conducted the first print industry convergence study. The analysis of commercial, in-plant, packaging, wide-format, garment, and industrial PSPs validated the convergence phenomenon, assessed the degree to which it is occurring, measured attitudinal beliefs as to convergence trends, and defined a print industry migration pattern.

The research confirmed the anecdotal migration evidence: 81% of PSPs are entering or considering entering a print segment other than their own.

Three years later, with industry forces such as digital adoption, service provider contraction, increased e-commerce demand, and external factors such as a global pandemic impacting the industry, NAPCO Research and PRINTING United Alliance have reassessed the degree to which convergence is occurring across print segments and have redrawn migration patterns across segments.

DOWNLOAD THE CONVERGENCE STUDY HERE!

The data is clear: convergence in the print industry is growing. Printers in every industry segment are considering entering areas beyond their primary focus, and many already have done so. Not only has the percentage of service providers considering segment expansion increased since 2018, the number of different segments that printers are considering entering has increased substantially as well, with more than half of printers surveyed considering entering three or more print segments beyond their primary focus.

As we emerge from an unprecedented global pandemic, we are seeing changes in global economics, consumer behavior, and print buyer behavior. This research provides a critical input for both PSPs and manufacturing and technology vendors in understanding how their industry is changing and how they can adapt with it.

Packaging Printer Participation

The study included representation from across print segments with 20% of respondents coming from packaging service providers. The breakouts from packaging segments are highlighted in the graphic below.

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Packaging Printers Exploring Multiple Segments for Expansion

Looking at packaging printer findings, each segment beyond their primary segment is being evaluated by no less than 23% of packaging printers (vertical column). The segments that hold the most interest for packaging printers are graphic installation (42%), industrial (36%), commercial (33%), and graphic & sign (33%). Seventy-seven percent of packaging printers are exploring expansion in their own segment (evaluating launching new applications).

A non-trivial percentage of printers in other segments are evaluating entering the packaging segment, with labels being the most attractive area (horizontal highlighted rows). Forty percent of commercial printers are considering entering the labels (packaging) segment, and 38% of graphics & sign printers are considering the same.

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What market segment(s) beyond your primary segment has your organization entered or are considering entering? n=467

Interest in Expansion into New Segments Growing

Comparing interest in expansion by packaging printers from the 2018 convergence study to the current study, interest in all external segments has grown (highlighted column). The most significant increase occurred in graphics (31% increase).

Conversely, interest in expanding into all packaging segments has increased among printers in all segments (horizontal row). The only decrease was seen among commercial printers considering expansion into labels (3% decrease). Notably, packaging printers in the current study are showing an increased interest in expanding within the packaging segment when compared to data from the 2018 study. Most significantly, interest among packaging printers in expansion into corrugated packaging printing has grown by 27%, and interest among the same group in expansion into labels printing has grown by 24%.

Click image to view the full sized chart in a new tab.

What market segment(s) beyond your primary segment has your organization entered or are considering entering? n=467

The Future: Continued Convergence of Print Segments to Better Serve Print Buyers

The big question for print industry service providers, manufacturers, and vendors is “what does all this mean for the future of the industry?”

NAPCO Research and PRINTING United Alliance’s view is that convergence will continue to occur across print segments until such time that there is a blurring of the lines between different types of service providers.

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This will occur because:

• A model in which a print buyer’s service provider can meet more of their print buying needs is ultimately more convenient and efficient for the buyer.
• Contraction in the print industry and a push by service providers to find ways to grow their businesses will continue to drive expansion into additional segments and, by extension, convergence.
• Technology continues to evolve such that it continues to become easier for service providers to spin up new businesses than ever before.

Print service providers and technology/software vendors serving the market must be ready to meet the changing print landscape head-on so they can continue to thrive in the near and long term. To learn more about print industry convergence, including must-do’s for PSPs, download the new NAPCO Research and PRINTING United Study, Convergence in Print: A Shift to the New Normal. 

Join the NAPCO Print Industry Research Panel and gain exclusive access to unpublished data and reports. Participation requires completing a 3-5 minute web-based survey approximately once a month. Follow this link to join our business panel: research.net/r/PrintPanel

Analyst Insights features research and analysts insights from the NAPCO and PRINTING United Alliance research teams. Market research is valuable for making strategic business decisions, solving challenges, and pursuing opportunities and the NAPCO Media research teams survey, analyze, and monitor critical trends related to marketing, printing, packaging, non-profit organizations, promotional products, and retailing. To learn more about how the team can leverage its research and industry subject matter experts to support your organizations needs contact research@napco.com.