The History and Future of the U.S. Sign Industry
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The History and Future of the U.S. Sign Industry

Here’s a quick perspective on the size of the U.S. sign industry and the impact of wide format inkjet printing in the sign industry today.

By Michael Flippin

I am a fly fisherman. And much to my wife’s displeasure this hobby has reached new levels of obsession. I’ve spilled bottles of fast-drying glue on the kitchen counter, have boxes and boxes of ‘must-have’ materials and am able to sit for hours on end tying flies in atop a pile of thread, colorful feathers and shiny tinsel hair.

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  • So what does this possibly have to do with an article about the sign industry? One very important thing ­ the lesson I learned years ago about the significance of perspective.

    What’s The Objective?
    Our home is littered with fishing catalogs and magazines. And I might wager that every outdoor sporting journal at some point has joked about the guy who went to buy some camouflage trousers but couldn't find any. Don’t worry; that was my one and only attempt at a joke. But it does raise a valid point about market research: the good stuff (or the bits that directly relate to you) is often difficult to find. It is important to question what you read ­ especially the stuff about market growth and technology adoption ­ as the big sexy numbers get attention and usually find their way into press releases and articles. So I’d like to give our quick perspective on the size of the U.S. sign industry and the impact of wide format inkjet printing.

    In the Beginning
    Web Consulting has been tracking and analyzing U. S. sign industry for 15 years. I realize that our work will never bring us celebrity status, but we are comfortable with our role as a resource to leading players and suppliers in imaging markets around the world. We have tracked the U.S. sign industry from a $5.08 billion market in 1992 to what was a $10.61 billion market in 2006. And our research shows an overall annual growth rate close to 6%. Sound the alarm!

    Those figures are absolutely indicative of the entire market, but may not necessarily reflect the performance of any particular shop or market segment. Web Consulting further dissects the sign industry into four segments - electric shops, commercial shops, franchise shops and vinyl shops. And each segment has a specific profile, markets served, applications produced, growth rate and adoption tendency towards inkjet printing. To complicate matters more, not only is each segment behaving independently, but there are regional differences as well. An example is that vinyl shops in the southeast region of the U.S. are, as a whole, having more success than vinyl shops in the northwest region of the country.

    I doubt that anyone would disagree that a lot has been written and promoted about inkjet printing, its capabilities and the impact is will have on traditional imaging markets. But did you know that the formal history of inkjet dates back to William Thomson (later known as Lord Kelvin) in the mid 19th century? He was granted a patent in 1967 on the use of electrostatic forces to control the release of ink droplets on paper. It was nearly a century later (1948) that the first continuous inkjet system was patented in Sweden, and inkjet technology has been shaking up the imaging world ever since. Many technology gurus claim that inkjet has only scratched the surface of its capabilities, and I believe them, as they are engineering folks and not marketing folks. So where do we stand today?

    I have given more than 50 market presentations to global audiences on four continents. And most audiences want to hear about growing markets and exciting new opportunities. And that’s fair. So while I can speak to those dynamics I always include a reality check. The market for traditional signage and graphics is still twice the size of inkjet printing. Web Consulting estimates that in 2006 the retail value of all signage and graphics printing was $20.6 billion. While the total sign industry captured $10.6 billion (51%), traditional methods still captured eight times ($9.4 billion) that of inkjet printing done by sign shops ($1.2 billion).

    Why Me?
    Why has there been so much hype surrounding inkjet printing? Well the printer makers, media suppliers and ink developers want to sell more stuff. And a decade ago, the market was simply booming, but sign shops were relatively slow to adopt inkjet technology. And this posed a great opportunity for these suppliers, as there is twice the number of sign shops in the U.S. than in every other user segment combined. Of course not every sign shop is a good fit for inkjet printing. So even if we extract the 9,500 electric shops (a segment with very low inkjet adoption) there is still more ‘eligible’ sign shops (12,500 shops) than the pool of 4,000 digital print shops, 2,500 or so photo labs, about 3,000 graphic screen printers serving the U.S. market. But . . .

    Until recently, the value proposition for inkjet hadn’t quite been right for many sign shops. But that is changing, and so are the opportunities and the technologies that best match them. I fully believe that inkjet is a disruptive technology which, according to Christensen’s book The Innovator’s Dilemma, is something that offers a market “a very different value proposition than had been available previously.” How many of us said that the quality of inkjet isn’t as good, won’t last as long, or can’t do what I do today? This is disruption in the making, and while the market for inkjet among sign shops is still growing, certain segments are experiencing tremendous opportunity.

    But how big will this be? I like to quote Yogi Berra who said that “It’s tough to make predictions, especially about the future.” And while it is next to impossible to accurately pinpoint the direction and rate growth for each, there are a few fundamental trends for the future that I whole-heartedly believe. The first is that inkjet printing of graphics will continue its double-digit growth and will soon be the number two volume technology for wide format graphics. The second is that the potential market for flatbed inkjet printers and UV-curable inkjet printing systems has only scratched the surface. Alarm!

    Reality Check!
    It’s easy to get caught up in the excitement of flatbed printing and UV-curable inkjet technology. For one, the market has been touting some crazy growth rates recently - the number of flatbed inkjet printers sold in the U.S. has doubled each of the last three years. And it continues to gain more momentum. So while that is impressive, I need to say that it may not be for everyone. It is important to note that 75% of all companies serving the U.S. signage and graphics industry have annual sales under $2.5 million. In fact, more than 40% of U.S. shops have annual sales under $500,000, so this technology is not viable for every shop and may not have the financial feasibility of older aqueous inkjet systems.

    Future Look
    I remember my grandfather often complaining that things “aren’t made like they used to.” And that was about U.S. goods some 20 years ago, so I can only imagine what he would think now. I believe that most technologies can coexist. I am not suggesting that the market won’t change, as it will. Inkjet’s position on a global scale and here in the U.S will advance but I do believe that there is still a place for things done and relationships maintained “the good old fashioned way.”

    Michael Flippin is president of Web Consulting Inc., a consultancy to the digital printing, traditional signage, and graphic screen printing industries. Founded in the U.K. in 1993, Web Consulting (www.web-na.com) is currently based in Boston and provides market modeling and forecasting, primary market research and custom analysis as well as an annual series of industry reports. Michael can be reached at michael.flippin@web-na.com.

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