Online printing is a market worth around €500 million in Europe, where companies that did not exist at the turn of the millennium are generating revenues of many times this. Cimpress, the company that includes Vistaprint, will exceed $2 billion of sales for its 2017 financial year; FlyerAlarm, the largest German business, is running around €350 million of sales a year.
Add in United Print, Onlineprinters, Saxoprint, Helloprint, LaserTryck, Quinns, Solopress, Route 1 and others, all growing at double-digit rates, and this is a sector that is transforming the way that print is specified and ordered.
But so far this is barely scratching the surface. Online print businesses cover an estimated 5% of the market for print in Europe. “We shout louder than we really are,” says Ali Jason Bazooband, marketing director at United Print. However, with some anticipating that as much as 50% of print may be sourced in this way, perhaps the sector is not shouting loudly enough.
Arguably the starting gun was fired by Vistaprint and the humble business card. Just as Amazon began with books because consumers know what a book is and are not going to send it back for being the wrong colour, everyone knows what a business card is.
Apart from anything else it was one of the most expensive printed items to purchase and one that many printers dislike producing, but they have had to do so to maintain relationships with their customers.
Business card printing was begging to be transformed by online design, purchasing, printing and delivery. Customers even put up with the slight decrease in format that Vistaprint imposed in order to optimise its sheet usage because the cost of the card was negligible. The company came in for criticism for printing for nothing (except an ad for the Vistaprint service on the reverse of the card) and charging heavily for delivery. It has changed: competitive pricing now comes with lower delivery costs.
All this is possible because the volume of orders coming in and because of the way they can be imposed on a large sheet. Rather than a few cards that a small printer might put on a B3 press, Vistaprint was filling a B1 sheet, and progressing from plate to box along a highly automated production path with absolutely minimal touch points.
Low prices become sustainable. And from business cards the step to flyers and other print and trim printed items follows the same logic.
And as with Amazon, once a customer is satisfied in buying a low risk product, online printers can go on to sell consumers other products, with higher values. These may be low cost flyers to advertise an event or a business; they may be photo products and increasingly they can be more sophisticated higher value printed products: brochures, catalogues and books.
This is happening. Average order values are increasing steadily as customers specify multi-section catalogues as well as brochures and books. It is no longer unusual to pay a four-figure sum up front on a credit card for several thousand printed items. A job that is not paid for does not go on press. If nothing else, online print is wonderful for eliminating bad debts and cashflow.
Presses at Saxoprint, part of the giant CeWe group, in Dresden are today as likely to be printing high end brochures for Swiss watchmakers as they are flyers for a student night at the local disco. Quality is not an issue. Customers are invited to check any number of certificates that show adherence to ISO standards or environmental qualifications.
And arguably, as the online print businesses are continually investing in the latest presses to enjoy the fastest makereadies and instant control systems, quality will be greater and certainly more consistent than the same job printed on a ten-year-old machine by a local commercial printer.
Feedback is also instant. Consumers have recourse to review sites and woe betide any printer that does not pay attention and respond immediately to a poor review. Solopress leads the review count with more than 10,000 customers contributing their thoughts. More than 90% are positive, and those that are not receive an immediate public response.
Solopress director Aron Priest leaves instructions to respond on his behalf to comments on his LinkedIn account if he is tied up in a meeting. Leaving bad comments to fester is like leaving a wound untreated, hoping the injury will get better of its own accord. It will not.
The list of those reviewed includes the majority of the big name companies, even if they target professional resellers of print rather than end consumers who leave the reviews. All manner of websites, whether fronting a real printer, or merely a business that scoops the orders for another online printer, spring up offering the cheapest possible print.
Comments left on the review websites can be revealing, even if those writing have no experience of assessing the quality of print. Some have even published YouTube videos of a vlogger unwrapping a box of business cards.
The successful online print business will have a standardised production flow, limit the range of papers a customer can select and fix order quantities. This is because jobs are ganged up on the same sheet to reduce the cost of makeready in printing each job.
This is perhaps the biggest challenge: imposition and scheduling are intrinsically linked and the imposition needs also to set the cutting sequence. The choice comes between printing on the largest practical sheet size or a smaller format press with fewer jobs. A very large format sheet may take longer to fill to maximum capacity than running with a B2 format machine which will enable jobs to be turned faster, but each job will share a greater makeready element.
Either approach is valid, depending on the type of work being handled and how the stall is being set out. Solopress, for example, runs B2 format presses, and completes jobs the same day they are ordered. This would be impossible running an eight-colour 162/4 format press. These are installed at FlyerAlarm in Germany, the key difference being the turnaround time that is acceptable to a customer.
German buyers it seems are happy to accept a five-working-days turnaround on even simple work. This allows the printer to plan the impositions in such a way to optimise production efficiencies.
Needless to say the British buyer wants an Amazon Prime service: a job must be shipped overnight. Quinns will even print and deliver the same day from its new plant near Liverpool. Grafenia is trialling a four- hour service using its Nettl network.
The "I want it now" attitude has provided a barrier which continental printers have struggled to overcome. With several hundred miles and the English Channel between German, Italian or Danish printers and the UK buyer, overnight service becomes impractical.
Onlineprinters has tackled this through the acquisition of Solopress this year. Saxoprint has been working with Pureprint as its partner to provide an onshore service for jobs that need this speed of turnaround. The testing and bedding in phase is now coming to an end and Saxoprint is ready now to market the service.
Both Onlineprinters and Saxoprint have targeted marketing efforts at designers as well as print brokers, resellers and other printers. This year Saxoprint has sponsored a design a British postcard competition which will be judged by John Lydon, who as Johnny Rotten, might snarl “How British”.
Saxoprint senior key account manager Philip Foster points out that the Dresden company makes no secret of its origins. He frequently guides UK buyers on trips to the factory. It reassures them that there is a real business behind the website and all are astounded that thousands of jobs are in progress at any one time, that there is no air of panic, and so few things go awry.
The order intake is mind boggling. Keith Hanson, appointed this year to help FlyerAlarm make an impact on the UK market, says that the company can have 25,000 jobs in progress at any one time.
The UK has been slower to adopt this way of working than Germany, which is reckoned to be five years ahead. But it is catching up fast, and with the faster turnaround required could be considered to be ahead in some aspects. Spain and Italy are also fast developing markets in Europe while the German speaking markets and into the Netherlands and Denmark markets are more mature.
These are in easier striking distance of the mega plants that are churning out the material. The signs of maturing markets are becoming clear as prices for simple products have fallen to what many claim must be their lowest point.
These printers are looking for points of difference. It may be as simple as offering a 150gsm paper, rather than 135gsm and 170gsm: better impact than one and less expensive than the other. It is more likely to be promotional large format products, covering banners and flags, or other branded promotional products: umbrellas, deck or directors chairs, tables, sledges and so on. Large format is a boom area for all those offering it.
Custom Gateway in contrast can supply smaller promotional items printed on flatbed inkjet machines and supplied through affiliate websites. It too is enjoying spiralling sales.
Another approach is offering higher value papers from quality paper mills. Onlineprinters has commissioned a special range of paper from German mill Gmund; others may offer to print on papers from Fedrigoni and the like that deliver a greater impact for a higher value job. This year Onlineprinters has struck a deal with a letterpress printer in Essen to produce higher value business cards for customers in the countries that Onlineprinters operates in.
Wedding stationery in particular uses these materials and has proved a boon for Tangent Communications and its Printed.com brand. It has this year added a white print option for this type of work ordered through the website.
The result of the expansion of online printing in Europe has been a severe squeeze on local German printers. They have been unable to compete on price for straightforward work and many have closed down.
Some have continued to work their customer base, farming out low cost work to the online printers while focusing on higher value jobs that need to be passed on press or require a greater degree of collaboration. Others have sold their presses, instead using the trade suppliers according to price and service required.
In the UK print resellers are known to check pricing across a number of providers to get the best price for a job. It is not a market that promotes customer loyalty, hence loyalty schemes that offer increased discounts and other benefits (increased number of sample packs for example) that some companies are offering for reaching target volumes of sales.
The ultimate extension of this way of thinking is to run an online print business which has no hardware behind the web pages and offers the cheapest flyers/business cards/ posters available.
This is why Saxoprint is happy to welcome visitors, why Aron Priest and Andy Smith at Solopress were welcome at Onlineprinters. The secret sauce that these businesses have lies in the software and that cannot be seen on a factory visit.
The challenge all face is to devise the most automated passage for work as possible, starting with a way of grouping jobs to reduce the variables in a set up to a minimum. This means running the same papers for as long as possible. It means batching jobs by
delivery date rather than order date; perhaps by limiting finishing process and balancing workflow through the guillotines so that complex sheets do not always follow each other resulting in an unwanted bottleneck at the cutting stage.
It is not always down to software. Piles of work in progress at Onlineprinters, for example, are identified by different coloured cones on each pallet to indicate urgency as well as the barcodes on job sheets to identify each job. Quinns uses a similar concept to identify the urgency of each pallet of print.
As with any lean management system, having to search for the next job to process is a waste that has to be eliminated particularly where there are tight delivery schedules to meet.
The search for efficiency is constant. Bluetree, owner of Route 1 and Instantprint, this year promoted Jim Swain, a six sigma black belt, to operations director having appointed the efficiency expert last year. He has had a big impact on the way workflows through the Rotherham factory, says joint founder Adam Carnell, changing what had seemed a logical flow from paper in, through digital, offset or large format lines to finishing, wrapping and dispatch that had been set up when the company moved into its vast new factory.
This is not essential. Solopress is spread across a number of buildings, ferrying printed sheets several hundred metres along the road to its finishing factory. Owner Onlineprinters has grown in a similar way and is spread across several factory units in its home town as it has grown.
At Bluetree, a new self contained unit will focus purely on efficiency sapping business cards, comprising Fuji Jetpress 720, Autobond laminator, Scodix digital enhancement and Rollem unit to automate cutting, slitting and wrapping cards.
With everything else standardised, the business should be able to cope with a greater range of substrates, for having enjoyed low cost cards, the indication is that buyers want differentiation. Moo began this with reassuringly expensive cards that have been essential for high tech start ups.
The link that Onlineprinters has forged for letterpress cards is part of the same trend, but also indicates another trend, the creation of networks of partner printers who have developed very niche specialisations that are difficult to replicate or too niche to justify the investment.
German's Wirmachendruck was perhaps the first to employ this business model in the online print world. It had built a network of printers perhaps with distinct skills, perhaps with overlapping services. WMD offered the technology to take orders through the web portal and direct each job to the most suitable print producer.
WMD also covered the marketing costs and the printer has only to focus on printing. WirMachenDruck is now part of the Cimpress empire as its first acquisition on the home turf of its fiercest rivals.
WMD fits perfectly with the Cimpress concept of the Mass Customisation Platform where artificial intelligence software directs any job to the most appropriate partner to produce the job. This may be an operation within the Cimpress group, Tradeprint, Vista in the Netherlands and Pixartprinting in Italy, being the European production hubs, or an external supplier that has plugged into the WMD.
It is early days for MCP for Cimpress, having tested it with a limited range of products in the run up to Christmas last year.
However, Cimpress does not have exclusivity on this line of thinking. Helloprint, a Dutch business which has also cast lascivious eyes over the UK market, has no production technology of its own. Instead it works with print partners signed up to quality and delivery SLAs. One, for example, is using a Ricoh VC60000 to produce batches of single-sided posters ordered each day. The company receives an order at 4pm each day, prints, cuts rolls the poster into a tube, matches the address label and puts it in the post. It receives an agreed price per poster and does not have the cost of employing a sales or service team to process customer files.
In the UK Helloprint is continuing to build the network with 25 partners to date providing the delivery, but still only a minority of the orders for UK customers. At its increasingly crowded four-level block in Holland there are around 100 employees.
As well as support teams answering calls and helping to upsell customers to better quality papers, add on products or simply additional volumes, there are teams of data scientists poring over the figures showing what people order with the same detailed interest as any supermarket. And just as the supermarket will order more barbecue food in anticipation of a fine weekend, Helloprint will also plan for the arrival of good weather.
The danger of this approach is that for the online business its partners may not deliver the consistent quality needed or may not invest in order to keep up. For the partner printer the flow of jobs may not be predictable and looking after the online flow may mean neglecting existing customers.
We have been here before. Print management seemed to offer a way of using idle capacity to the benefit of printer and customer. However, many printers came to rely on print management work at narrowing margins and have suffered for it. Others believe that as growth rates slow, there must be consolidation among the existing suppliers. Perhaps Online’s purchase of Solopress is an indication of more to come, certainly so if the major European players want production facilities on this island.
It is a sector which is continuing to develop. Until recently the mix of products that it is possible to describe and order has favoured simple print products. It is now swinging to include a vast choice of large format inkjet printed displays, promotional goods, clothing and a much broader choice of print on paper products.
It is a far cry from the business cards and flyers. These are the products that printers wanted to produce, says Gary Peeling at Where The Trade Buys. They are simple to gang up on a sheet, simple to finish and importantly, like Amazon’s books, people understand instinctively what to expect from them. But growth is limited, perhaps 3-5% pa compared to double digit growth for many other products.
Those producing these will also need to dedicate increasing marketing budgets to promoting the service. The cost of doing so is increasing: Google Adwords can charge £25 per link, taking away any chance of earning a profit on the transaction.
For smaller UK printers who want to offer online printing the rewards from setting up a business to consumer website are therefore limited. One that had attempted to do so is now scaling back the online effort in favour of connecting with existing and ongoing customers via a browser.
This form of online printing removes the uncertainty associated with touting for business on the open web. The customer has an existing relationship with the printer and uses the web interface to simplify the ordering of straightforward print products.
The approach that one company has taken exploits the move to online purchasing without actually participating. Printmeit in County Durham runs a website that looks like an online print site, including prominence to its score on review websites. It has images of the product types on offer, displaying a price for these in the same way that others will show what printers can pay for flyers, cards and so on.
But most orders and transactions are conducted in a more traditional way. There is a design studio for customers, drawn from both the local business community and those much further afield. Others can upload print ready files, accepting the offer price.
“Most of our customers are not from large high end organisations,” says managing director Adam Chetter. “They may want a batch of 20 business card sets and will send us a PDF with the order rather than having people who can spend time to log on and send a data file. We try to operate on the same level as the people we work with.
“With a Vistaprint if there is an issue with the artwork it may not be noticed until the job is delivered. We will call the customer and guide them through the process and can give them advice to help for the next job. Sometimes there are companies that are cheaper than us, but we want to build a long term relationship with customers.”
It can also work as the production end of a business running the website. This is where Precision Printing worked with photo product companies to fulfil orders for greetings cards, photobooks, calendars and similar personalised items. It provided the expertise in handling orders of one that has laid the foundation for Where The Trade Buys.
B2B business models that follow this principle also exist. Norwegian company Gelato has moved from offering products directly to consumers to working with global companies. It has a network of printers around the world, each with HP Indigo printers that can guarantee the quality of each job thanks to calibration checking each day.
Other individual printers have created online links to their own customers strengthening a relationship and often delivering more than just print to customers as a result because it can track who has ordered work, assign costs to departments or sites and so on.
All printers need to offer something like this to customers even if they do not want to open an online portal to consumer or trade buyers. The internet’s influence on print buying has only just begun.