Retail has always been a key market for large-format digital print companies. So how will the sector be impacted by the retail reboot - or lack of? I asked well-known consultant Steve Lister for his take.
How do you think the retail reboot is going to play out – and how do you think that will impact the large-format print sector beyond social distancing graphics?
This is the million dollar question. Lockdown created a change of habits which may never change back again. We have seen unprecedented online growth so retailers will have to give customers a reason to come back to stores - they need to give them the experiences they so missed in lockdown.
Retail footfall is still at -54% of the previous year and this will increase the pressure on some retailers to remain closed or to completely review their retail estate. The industry has already seen some high profile brands and retailers close their businesses forever. There is no doubt that we will see a continued consolidation of retail outlets as brands and retailers try to figure out the best store estate size for the future. The one thing we do know is there isn’t going to be a Pret A Manger on every street corner moving into 2021. There is no doubt that this will have a huge knock on effect with the amount of POS and print being produced for retailers.
At present we are seeing huge print volumes around the social distancing messaging and this is not going to go away in the short term. What has gone away, and the volumes significantly decreased, is the seasonal and campaign launches which is customary from all the brands and retailers. If we take Unilever, one of the largest FMCG companies, it cut ad spend by 40% in the first half of 2020. Considering that it spends 3.5% of its 52bn Euro on marketing that is a huge decline in the amount of in-store marketing and print being reduced - and that just one company.
The good news is that Unilever has announced that it is planning to ‘invest heavily’ in its brands and marketing spend in the second half of this year. There is no doubt that we will see a return of campaigns and new products launches but the print volumes that surround these will be more considered than the past.
The issues that brands and retailers have is that they are fighting for effective messaging with the social distancing messages. They do not want to overload their stores with POS and print and they look cluttered or de-value the brand. From the marketing meetings I am attending I am seeing some great campaigns coming but they will have fewer pieces and more effective and impactful designs.
More than ever the brands and retailers are completing pre-launch testing of their designs to ensure that their marketing messages are being seen. Their mantra now is that POS that isn’t effective or have immediate impact is a waste of money, and we already know that marketing budgets are cut and teams are un der extreme pressure to delver than ever before.
Will those PSPs not used to dealing with the big brands, retailers, shopping mall owners etc. get a look in - or is the supply chain going to increasingly focus on the big players dealing only with big print outfits?
Outside of the major brands and retailers there will always be a need for print and POS in the smaller high street retailers and independent stores. There are some really good initiatives from the small business community and this represents a huge opportunity for those in the print industry to use their incredible knowledge and experience in servicing a whole new set of customers. I fully understand that the print runs won’t be as high as with the major brands or retailers, but I bet the margins will be better!
There is a global trend moving towards more local shopping anyway, with the large out of town shopping malls declining dramatically as consumers shun the idea of getting in their cars and driving to what used to be a packed mall with the same cookie cutter shops. Smaller, more artisan stores with local produce will grow as consumers have formed new habits in staying within a smaller locality to socialise and shop.
So how proactive are PSPs - especially the smaller ones - going to have to be to ‘sell’ the ‘knowledge’ of what print products are now available to help them make a splash/differentiate themselves as a physical store?
As an industry I don’t think we’ve been as proactive as we could have been because the volumes have been there - and that’s not a criticism, it’s just my observation. However, this is the time where PSP’s have to get out there and find new customers and leverage their relationships with their existing ones. This is the time where we have to showcase exactly what the industry is capable of, huge creativity, great designs, a wide range of materials and hopefully all still underpinned with producing in a sustainable way. When you think of the changes that bars, restaurants and cafe’s have had to make - re-inventing themselves into home delivery companies etc. just to survive - that’s the level of creative thinking the PSP’s now need. It’s all about innovative thinking.
Lots of PSP - of all sizes - are investing in creative teams - Widthwise 2020 again reiterated this. Do you think this will be a valuable move in terms of gaining retail work?
Personally, I think this is the number one thing moving forward that will drive our industry forward. In these uncertain times, creativity wins every time. Firstly, companies need to communicate effectively to inform and inspire new or existing customers. If those people don’t know what you do then you will never get an order! There are a lot of companies out there vying for business and it’s going to get competitive, so you’ve got to get your message heard and stand out from your competitors.
For me, the other side is maximise all the social media channels like never before - we are in a visually exciting industry, but how many PSPs have Instagram, LinkedIn or FaceBook accounts targeting on their locality or nationally? I bet very few, but this is where the ‘eyes’ are all looking at the moment so start a meaningful plan of action to get your business out there and selling yourself like never before. Create a new service or style that no-one else is providing - make your business indispensable!
Partnership working (between PSPs/shop fit-out specialists etc) - is it becoming more of a thing to meet retail supply chain demands do you think?
I think this is key to the future success of PSPs - creating robust partnerships within the supply chain. Do not look on these are ‘competitors’ they are a way of securing short- and long-term business opportunities. Why wouldn’t a print company partner with a retail fit-out company?
We know sustainability/environmental issue are climbing the agenda when it comes to the brands - how is that likely to impact PSPs in this sector?
Over the last few years we have seen a huge rise in the public conscience about ‘doing the right thing’ when it comes to the environment. All the major brands and retailers have huge, board level commitments on sustainability and this is not going to go away because of Covid-19. Now, like all downturns and at times of crisis, some issues get pushed back and sustainability is no different, but I think this time it’s not going away.
All the hard work by the ink and media companies to eliminate PVC and enhance their environmental credentials are still a prerequisite of doing business with the major brands and retailers. In saying that we are seeing the smaller independent retailers wanting to have recycled materials which can be recycled easily at the end of life. Communicate about the materials you use in a simplistic way and explain recyclability so you become the supplier of choice.
I think more than ever that those in the print industry will need to clearly demonstrate that they can fully declare their supply chains and understand and communicate their commitment to sustainability.