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In
the mid 2000's, Gary Lovell, spent several years running a label broking
business. With the onset of the
recession, all of business started tightening their belts and pushing suppliers
for better pricing wherever and whenever they could. Label
printing was no exception, and I found margins on traditional flexo printed
work being squeezed to almost intolerable levels.
The area that not only saved his business, but led it to a period of unprecedented
growth, was digital labels. Having been
involved in labeling for over two decades, Gary could safely say without any shadow of a
doubt that the birth of digital label printing
is by far the most exciting development in the label printing industry.
Low setup costs, lack of minimum orders and no requirement for printing plates
were the selling points of digital. In the past, it was short run work where
digital made it's impact in the market. It
appealed to startup companies where cash was at a premium. It also appealed to smaller artisan label manufacturers who didn't want to
commit to larger runs, and to businesses who kept their products fresh by
reimagining the designs on a regular basis, but didn't want to spend money on
expensive printing plates.
Gay has estimated that, at his previous company, 95 out of 100 new orders were
digital. It was a revelation. Several companies invested in digital printing presses and sold
themselves as small run label
manufacturers, a marketing strategy that still exists to this day.
Fast forward a few years and Labelsprint
Ltd were looking at their next digital press investment. As the largest digital label printer in the UK we were
already in a strong position in the market.
They were however faced with a dilemma.
Their sales figures, that had enjoyed a period of incredible growth over
the previous few years, had started to flatline. There was more competition for the small run
market and it was only a matter of time before profit margins, both our
competitors and our own, would begin to erode as end user and trade customers
played us off against each other. Had
the short run market reached it's nadir?
Was there really double digit sales growth to be enjoyed in a market
where the typical order value was in the low hundreds?
At the same time, many of their clients loved what digital labels brought to
their business. They enjoyed just in
time ordering without MOQ's, they enjoyed the full personalization that digital
offered and they were greatly impressed with the quality (especially when shown
on shelves next to flexo printed labels
in their range). Existing customers,
whose label spend was split between digitally and flexo printed labels, were constantly asking us to offer digital pricing
on larger runs, but unfortunately the comparatively slower speed of digital printing meant that,
commercially at least, it was still a
short run solution.
The answer to both Labelsprint's conundrum and our customers requirements
arrived in the shape of the Xeikon 3500 digital label press. With it's increased speed and 500mm wide
printing width, the cut off point where a digital run becomes commercially
viable has been raised considerably. Our
customers immediately saw the benefit and runs of labels that would and could
have never been considered viable for either party are now being run on a daily
basis. With this press, marketing
digital as a short run solution is woefully underselling digital labelling.
In
fact, Labelsprint successfully tendered
for and won a major contract (that had been previously a loss making
flexographic job) BEFORE the new press was even installed! The run? 12 million labels. Hardly a short run.
They are now quoting for and winning work on, depending on label size
naturally, 10k to 250k runs. Their
average invoice value has jumped from three to four figures and our forecast is
to double the business within five years.
Whereas previously only hot foil
label printers, screen printers and label overprinting bureaus had the need
to fear digital, now flexo printers - that still account for over 95% of the
market - are anxiously looking over their shoulders as well.
Labelsprint has raised the bar. Digital
labels are no longer just about short run work, and as speeds increase,
presses widen and technology improves, it never will be again. Article Source: http://www.ArticleBlast.com |
