Fight & Flight: Print on Demand as our industry’s vaccine for 2021?
By Miki Rubin
Did you know that The Wright brothers’ first major collaboration was actually a printing press?
The Wright brothers, Orville and Wilbur, are most known for designing, building, and flying the first motor-powered, heavier-than-air aircraft in 1903. While many inventors were focused on creating a more powerful engine or lighter materials, the Wright brothers’ unique approach of a flying-machine as a system, or a combination of systems working together, was what really made a difference.
Yet, the Wright brothers’ first venture was actually a small printing business. They were printing commercially in the late 1800s and according to the Smithsonian Air and Space Museum, they even designed and manufactured a more efficient printing press which saw some initial steps in its commercialization.
This experience as printers paved the way for the Wright brothers to build their revolutionary flying machine a few years later which would change the flight industry forever.
Print today — Like aviation, printing too has significantly changed since the Wright Brothers and many printers around the globe are being forced to innovate to keep their businesses afloat.
We should start seeing print through different lenses, our industry as we know it has become all about high-precision on-demand manufacturing. It is efficient, process oriented, and most importantly local. Even more so, consumer demand is constantly pushing towards more highly customized products at lower cost, with faster and faster delivery times, and preferably in a sustainable way.
One of the most recent trends in logistics, is the shift to localization and near-shore production. This has led to the rise of micro-factories, which provide a wide array of consumer brands with agile, high-speed and on-demand production centers. They are able to respond to quick changes in consumer demand and personalization. According to a pre-covid McKinsey study, “60 % of apparel-procurement executives expect that over 20 percent of their sourcing volume will be nearshored by 2025”. This isn’t only a huge financial opportunity but also a significant improvement for brands to improve their waste-management and overstock problems (H&M in 2018 over $4B). This might be easier said than done, but options are being explored.
A few weeks ago I had the opportunity to speak to Josue Alzamora, Global Head of Lifestyle for Maersk. Josue believes that major brands are unlikely to drastically change to nearshore production because of the usual benefits of economies of scale. However, he does expect to see brands increase the use of customized products to improve customer experience and loyalty. Other brands are exploring more direct-to-consumer strategies and others betting on environmentally friendly brands not only in materials but in process as well.
Print On Demand (POD) — The most important factor here will be the technology and network that brings everything together regardless of what is actually being ‘printed’. At the end of the line, it doesn’t matter if its business cards, a t-shirt, mug or photo album. It’s all customized on-demand print.
Printers already have a trained workforce and high precision machinery ready. A clear and recent example of this was how the impressive blitz online printers like Cimpress and Helloprint set up to produce custom masks for the COVID19 pandemic. At Cimpress, sales of new products (like masks) accounted for 9% of sales in 2020.
The pandemic has accelerated e-commerce adoption in general. It squeezed into a few months what was supposed to happen in several years.
Shoppers have become more comfortable buying online. As an example, this past Black Friday weekend Shopify reported over $5.1B in sales through its online shops, a 79% increase compared to last year. At the same time, because of the changes in the workforce, more and more people are becoming entrepreneurs, either as a side-gig or even full time. As e-commerce continues to evolve, especially with new shopping features in the pipelines of Facebook, Instagram, TikTok, Whatsapp, etc. there will be more opportunities out there for entrepreneurship and other ecommerce channels, like drop-shippers with customization capabilities. All this has led to a decline in traditional, commercial print. Despite this, there are verticals that are on the up, especially: packaging, photoproducts, corporate and personal gifting. According to HP personalized gifting will grow by 55% in 2021 to ($31 Billion).
Corporations, brands, creatives, illustrators and even startups needing to reach other markets can benefit by leveraging global networks of local and near-shore mass customization capacity.
The opportunities are out there — great examples doing live/hybrid events like Hopin and Bizzaboo, corporate gifting bridging physical with digital like Sendoso and Alyce, personal gifting and photoproducts marketplaces like Shutterfly, Mixtiles and Zazzle. Will be interesting to see how it all evolves, or better yet, how we become part of this evolution.
Companies Leading The Way:
There are a few companies paving the way for the new ways of shopping.
Amazon
If we start analyzing a few of the steps Amazon has been taking in the last few years, we can definitely see a clear charge into the on-demand production of mass customized products.
AmazonCustom and AmazonMerch are powerful tools for both its small clients and big brands (like licensing deals for Disney, Marvel, Universal, Fortnite, etc.) A few months ago they announced a $400M investment in Kornit for equipment and consumables, which deepens their previous investment and collaboration. Tie all this into Amazon’s logistics know-how and infrastructure, and the sky’s the limit for Amazon.
Printful
It’s remarkable that a fairly new company has seen impressive revenue growth from its beginning in 2014 with $1M, to over $100M in 2019. A few weeks ago they announced shipping over one million orders a month and more than 100K active users (fulfilled an order in the last 12 months). It uses its own production centers worldwide which are in continuous expansion.
Gelato
Gelato claims to cover over five billion people worldwide in over 30 countries without owning infrastructure by building on lease capacity of global partners. CEO and founder Henrik Müller-Hansen recently shared via podcast how they are on track to surpass 100 million euros in revenues this year.
Their multi-tiered experience with OptimalPrint (B2C) and Gelato Globe (B2B), together with their focus billing, workflow and distribution are solid foundations for their API to enjoy strong growth. It will be interesting to see the advancement as they add new product offerings and connections to more platforms which are needing partners to produce and fulfill orders for the increasing demands of entrepreneurs and their final customers all over the globe.
Vistaprint (Cimpress)
With yearly revenues close to $3B globally, Cimpress is very well positioned to continue expanding its services from large worldwide enterprises to new pandemic-born entrepreneurs. With its recent acquisition of 99designs and recruitment of top level executives in customer care and experience from Netflix and Amazon, it looks like the perfect ingredients for a powerful open API .
Earlier this year they received a $300M investment from Apollo Global management, the private equity giants who also own photo and gifting leader Shutterfly and Snapfish.
Merch.Music (by HelloPrint)
HelloPrint might be a controversial business model for some in the regular print industry because of the reseller strategy and its relationship to its provider network. However, their technological and logistical experience to work with a complex mix of providers and customers to expand worldwide is quite an accomplishment.
Moteefe
Though relatively new to the field, they have raised over 20M in the past few years, with their most recent $11M raise just this past September, looking to become the POD platform empowering influencers, micro retailers and brands.
I also see huge potential for other companies who already are important players but could pivot and explore new verticals in network creation. This includes companies like Mimeo, Moo, RPI, Jondo, and Prodigi.
Equipment manufacturers follow very closely, and with certain advantages, with their own powerful platforms like HP with its robust PrintOS and SiteFlow, and Heidelberg with Zaikio. Also Kornit, very interestingly, with its recent acquisition of Custom Gateway.
Interesting year ahead — The end-customer is not interested in what brand of equipment the product was produced or customized on, what really matters is being able to deliver good quality at the right price in a fast, and preferably sustainable, way. This is what we are made for.
These fulfillment networks that enable the customer-brand relationship in a physical way are here to stay, and printers should take note. There is an ever expanding web of opportunities and integrations out there to continuously grow these networks. It will be interesting to see how they evolve and flourish in a fair way to all parties involved.
I am personally optimistic for 2021, especially for LATAM. Our region has the perfect ingredients:
In contrast to the ease you find in Europe or the US, border trade in our region is a painful experience. Expensive logistics and complicated customs between our countries, despite our proximity, create good opportunities for strategic partners in each country.
Strong year-on-year e-commerce growth, with double-digit growth and several of the top growth markets in the world.
High level of informality, with an ever increasing pool of entrepreneurship, new businesses, side-gigs and influencers bursting with creativity.
Having been raised in print, I am passionate about the industry’s resilience and adaptability to change. Leaving the corporate world in mid-2019 to build Imprimu, an online-print network for LATAM, has been quite a ride and learning experience, especially during COVID times. Opportunities are huge and with a great team the sky's the limit.
It’s time for adaptability and networks of collaboration. It’s time to start thinking of print as a system-of-systems, just like the Wright brothers thought of flight.
Feel free to reach out to me at miki@imprimu.com - always happy to have interesting conversations.