Where are the tools that will enable printers to make their businesses grow while competitors are eking out smaller profits in an increasingly price-driven print buying environment?
For many of the printers visiting PRINT® 05 & CONVERTINGSM 05 in Chicago next year, the answers will be in a special section of the huge show floor devoted to Mailing and Fulfillment opportunities.
PRINT 05 & CONVERTING 05 will take place September 9-15, 2005 at McCormick Place in Chicago, Illinois, USA. The displays will fill nearly 900,000 square feet (90,000+ net square meters) and attendance is expected to exceed 80,000.
The quadrennial event is the largest held in the Americas. It will offer a variety of special events and features designed to alert visitors to market opportunities, and the Mailing & Fulfillment Center is typical.
The print market throughout the United States in the last decade has been largely shaped by a major trend that cuts across many types of business. Clients want to streamline their supply chains and obtain services from fewer suppliers. At the same time, they want these suppliers to be able to meet more of their needs.
As a result, the days of going to different companies for design, print, finishing, mailing, and other services are gone. Commercial printing services have become commodity purchases - that is, clients perceive that many companies offer roughly equal quality, and make their buying decisions based only on price.
This trend convinced Al Kennickell, president of Kennickell Print and Communications in Savannah, GA, that a change of strategy was necessary. "If you're just bidding on print jobs, you're in a commodity situation and you could lose that business pretty quickly. It's much better to sell a complete package."
Kennickell decided to move his company into mailing and fulfillment. That decision was also a key to growth because it enabled the firm to transcend its small home base.
The Need To Grow
"We had to grow beyond our local market. With fulfillment and direct mail it no longer mattered where our client was." At first, Kennickell says, he partnered with a local mailing house, but increasingly expanded his own company's capabilities.
Many observers feel printers are ideally positioned to meet their clients' needs for mailing services because the vast majority of all printed material goes into the mail in some form. Print shops typically already have extensive knowledge of postal regulations, discount requirements, pre-sorting and addressing technologies, and the like.
Fulfillment services augment these mailing capabilities by enabling clients to have product inventories managed, packages of materials assembled, envelopes stuffed, coupons redeemed, rebates processed, and customer information captured… all by the same company that handled design and printing.
Go With What You Know
Consultant Clint Bolte points out that "more printers are closely attuned to mailing operations than to fulfillment. Mailing is much better established among printers because of its cost containment aspects."
The U.S. Postal Service is boosting this awareness still further by implementing a variety of new options for mailers. "USPS is trying to help mailers get higher responses by trying different new methods," Bolte says. " The hope", he adds, "is that this higher value in mailing will justify the Postal Service in charging higher rates, raising revenues and making up for some of what it is currently losing to email."
However, Bolte sees major growth prospects for printers in fulfillment, particularly in what he calls "information fulfillment." These tasks are designed primarily to capture information about a customer, and can include operations like rebate processing, coupon redemption, bundling of literature such as owner manuals and warranties, and handling of returned mail to update clients' mailing lists.
On-demand printing figures prominently in this mix, Bolte says. "Fulfillment will drive more value creation in the on-demand area than any comparison with short run printing and lithography," he adds.
New mailing options create an opportunity many printers can seize without a substantial new investment, says Patrick Peick, product manager for 3M Company's repositionable notes. "If the printer has any binding operation, they probably have 75 percent of the equipment they need for mailing already. Most printers have a postal expert right on the floor. Nothing is holding them back. There are not a lot of dollars to be spent to get to that next step, and there are a lot of people with the knowledge to start up this operation for the printer."
Although the transition is often logical, it still can require new skills and take time.
It was nearly two years before Kennickell's new operations became profitable, he adds. A lot of that time was devoted to improving processes. "You can't have a loose operation in this business," he says. "You've got to be very good at crossing T's."
Lourdes Madsen of Rapid Press, Tallahassee, FL, saw an opportunity because "most of our clients were very annoyed with the mailing houses in our area. We'd rush to get the print jobs out and then it would go to the mailing house and sit for days."
Offering mailing services for these and other clients "has really added a lot of value to our printing business," Madsen says.
The National Association for Printing Leadership reports that 40 percent of its members plan to add mailing and fulfillment services to their offerings. Indeed, mailing is among the top three new services that printers expect to generate important shares of their revenue and profits two years from now.
Cynthia Wollman, president of Sun Printing House in Philadelphia, PA, sees a strong natural connection between mailing and fulfillment services and another important emerging specialty, print on demand. "By combining print on demand with mailing and fulfillment, we can put together a wonderful business case for the client," she says.
Metzger's Printing and Mailing has developed a specialty in "point to point mailing," according to CEO Joseph Metzger. Serving this market combines variable data single-color digital printing with fulfillment and mailing services that even extend to filling customer mail orders for popular food products.
"If printers have had to diversify to grow, or for survival, they most likely are already looking at, or getting into mailing and fulfillment," Metzger says. "Technology increases profit, and reduces costs... Adding fulfillment increases costs, yet increases value and services to the customer."
Madsen cites a further benefit from diversification. When discussing mailing and fulfillment services, she says, "you sell to a higher level on your customer's corporate ladder, above the usual print buyer."
As a result, the printer becomes more closely connected to the client's entire business, and better known to upper management. "Print is still our mainstay," Madsen says, "but this is a value added."
In general, "printers" like Metzger reflect the growing recognition that companies emphasizing only printing will have a harder time competing and succeeding in the future. Printers instead must grow into broader and more capable providers of solutions to customers' communications needs, experts say.
As price competition has increasingly squeezed the profit margins of traditional printers, 3M's Peick cites yet another advantage to mailing and fulfillment: "It's also a chance for printers to get back some of the margin they have had to give up in the pressroom."
PRINT 05 & CONVERTING 05 will deliver many of the solutions these companies need.
The Mailing & Fulfillment Center is an expansion of similar features that have proved popular at the annual U.S. GRAPH EXPO® and CONVERTING EXPO® trade shows. Next year, the Center will bring more than 40 companies together into a single convenient showcase where visitors can see a variety of equipment and get authoritative advice from technical experts through a schedule of on-floor programs.
Many printers in the United States today are urgently seeking routes for expansion and profitable growth. Mailing and fulfillment services have the potential not only to meet that need but to bring printers new opportunities for creativity and impact as well.
"You never know where it's going to take you," says Kennickell. "There's so much you can do."
Complete information about PRINT 05 & CONVERTING 05 can be found at www.PRINT05.org.
