It’s Going to be a Year of Transition (we think)
Forecasting the future is an inexact science. We learned that when the rosy predictions for 2020 were dashed by April. So let’s try again.
At the LaManna Consulting Group we follow multiple sources all of which try to anticipate what changes will affect businesses in 2021. This is what we’ve extrapolated, as megatrends that will affect print businesses and their customers in 2021.
The experts at McKinsey & Company believe that overall, 2021 will be a transition year. As consumer confidence rebounds, businesses will exit survival mode and adjust their operations to post-COVID changes in the economy.
Changes will occur at different rates, depending on the industry, its customer base, and location. For example, business travel and daily commuting levels are likely to remain low. Yet demand is building for leisure travel, live entertainment, and in-person gatherings.
We’ve identified nine trends that will affect businesses involved in selling or buying printing, marketing, visual communications, and specialty graphics.
1. All businesses will re-evaluate how they operate.
Forrester predicts that remote work will rise to 300% of pre-COVID-19 levels: “Most companies will employ a hybrid work model, with fewer people in the office and more full-time remote employees.” The shift to greater acceptance of remote work will change how office facilities are used, how employees are recruited, and how workplace cultures are built and sustained.
“The pandemic has created an imperative and an opportunity for organizations to reengage with the workforce and reinvent their workplaces,” notes a Deloitte report. “How organizations handle the recovery may define their brands with both their workforce and their customers, establish their reputations for years to come, and determine their future competitiveness.”
2. The digital transformation of all types of businesses will accelerate.
In 2020, many companies were forced to adopt new technologies for remote working, data security, supply-chain resiliency, virtual events, and efficient operations.
Sure, not all first attempts to adopt new technologies succeeded immediately. But most people learned from their mistakes as 2020 progressed. For example, because virtual events reduced travel expenses and enabled more employees to participate, trade shows in the future are likely to be hybrid live and virtual events.
The digital transformation of printing that started 25 years ago will continue making headway in high-volume industrial sectors such as labels, flexible and rigid packaging, decorated apparel, and decor products such as wallcoverings, flooring, and laminate surfaces.
Other technologies that will gain favor in 2021 include artificial intelligence, analytics, cloud-based systems, augmented and virtual reality, robotics, and workflow automation.
Owners of printing businesses can use artificial intelligence to minimize wasted materials, monitor and adjust press performance, process and schedule orders, assist with shipping logistics, track inventory, mitigate data breach risks, and manage one-to-one automated marketing campaigns.
“Smart packaging” will use digital codes or RFID chips to monitor the freshness, purity, or authenticity of products, the on-time delivery of products, and the presentation of additional digital content through augmented reality tools.
Print-service providers who have delayed investments in workflow software have some catching up to do. Share on X“Many print-service providers in North America have yet to implement workflow automation across most of the organization,” reports Ryan McAbee of Keypoint Intelligence. “According to our most recent research, only 7% of respondents in North America were mostly automated across departments or fully automated after job onboarding.” More than 50% of survey respondents were still using manual processes in most or all of their processes.
The value of unlocking employee creativity is often overlooked, notes McAbee: “Automation can free employees from repetitive, low-value tasks, providing time for them to tackle larger operational or strategic challenges creatively.”
Employees in 2021 are geared up for change and understand that continuous learning and upskilling will be essential to keeping the business competitive.
3. Sales processes may involve fewer in-person meetings.
In October 2020, a McKinsey survey found that in the post-COVID-19 year, companies are three times more likely to conduct at least 80 percent of their customer interactions digitally. B2B companies reported that 90 percent of sales have moved to a video conference/phone/web sales model. More than half believe this is more effective than the sales models used before COVID-19.
In a year without business travel or trade shows, printing equipment manufacturers were pleasantly surprised to learn that some buyers were willing to purchase big-ticket digital printing presses without ever having seen an in-person demonstration. Customer-experience Centers that printing equipment manufacturers built for in-person visits functioned as video-production studios in 2020. Sales and technical professionals live-streamed equipment demonstrations to small groups of decision-makers and sent requested print samples by mail.
4. Many small businesses will close permanently, but new, innovative ones will launch.
The pandemic has forced the closure of many local restaurants, gyms, beauty salons, and other small businesses. McKinsey research shows that 25.3% fewer small businesses were open in December 2020 compared to December 2019. Small-business revenue in the U.S. fell by more than 30%. But in Q3 of 2020, the U.S. Census Bureau reported there were more than 1.5 million new-business applications (requests for Employer Identification Numbers) in the U.S. This was almost twice as many as during Q3 2019.
Start-up businesses often need help with brand identity graphics, promotional items, integrated marketing campaigns, and short-run printing providing plenty of business opportunities for those businesses that offer such services.
5. The role of brick-and-mortar retail stores will continue to shift.
While in-store shopping experiences will still matter, so will at-home or curbside product delivery experiences.
Direct mail, catalogs, printed graphics, and thoughtfully-designed stores will continue to earn attention from consumers—especially those experiencing digital channel fatigue. Coresight Research is advising brands to create unified “channel-agnostic” brand experiences across all selling platforms. Strategies should take into account how order fulfillment affects customer satisfaction and brand loyalty.
6. Younger generations and big corporations will drive the adoption of more sustainable business practices.
As the percentage of Millennials and Gen Z’s increase in the workforce, companies will focus on making sustainability an even more important part of their business.
Accupac, a contract manufacturer of beauty and personal care products, reports that brands are embarking on a new era of planet-friendly innovation: “If sustainability was a general concern before, it’s a major focus now.” The beauty industry (which generated 120 billion units of packaging in 2018) is now striving to be a less trash-centric industry.
7. Customers will place greater value on the security and privacy of their data.
A 2020 Conference Board survey of 30,000 consumers in 63 global markets found that 44% of consumers globally would be willing to forego customized content —such as personalized messages, offers, and experiences— in exchange for not having their personal data collected. In the U.S., 57% of consumers said they would give up customization for greater privacy.
People are also concerned about breaches of databases that include sensitive data. A survey conducted by the Netwrix cybersecurity firm revealed that 54% of organizations that store customer data in the cloud had security incidents in 2020. Insider data theft negatively impacted company valuation for 33% of the organizations. 35% of the responding organizations said data theft by hackers led to customer churn and loss of competitive edge.
Keypoint Intelligence analysts suggest that print businesses can differentiate themselves by highlighting their data security measures. Even better, they can promote accreditations or attestations for information security controls (ISO 2700 or SASE 18).
8. Companies will be better prepared for disruption.
McKinsey analysts believe disruptions are predictable features of doing business that need to be managed. One way to do that is to reduce supply-chain vulnerabilities.
Print businesses that had trouble getting materials or spare parts during the pandemic may seek to have more than one source of supplies and services. Likewise, print buyers may choose to be less reliant on a single source. The emphasis will still be on lean manufacturing, but analysts have dubbed this cautious, just-in-case approach “just-in-time-plus.”
M&A Activity will increase.
Top performing companies will build on their competitive strengths by acquiring discounted assets or companies with lower valuations. According to McKinsey, private equity firms globally are sitting on almost $1.5 trillion of unallocated capital ready to be invested.
For platform acquisitions that set the stage for future growth, buyers are seeking well-managed companies with processes that can be scaled up to manage, more complex, multi-site operations.
“Print will have to deliver on Industry 4.0 if the industry is to remain strong. Digital will be at the forefront of the change,” commented Simon Smith of CS Labels in a 2021 predictions post on the Digital Labels and Packaging magazine website. “Digital will be at the forefront of this change. The move from family-owned print companies to much larger companies driven by outside private equity companies will drive much of this change. As digital presses become faster and more expensive, more and more businesses will merge to achieve economies of scale and maintain the financial clout to invest.”
Conclusion
Print business leaders should pay attention to some of these post-COVID-19 changes in the economy.
Listen to how your customers’ business needs have changed, and suggest innovative solutions to new problems. Share on X
In APTech’s Leading Print magazine, Greg Coticchia of Carnegie Mellon University’s Master’s Product Management Program, urges print business owners to think like an entrepreneur again and look for opportunities to fill emerging needs.
What trends are you seeing? Buy, sell, or grow: which path are you pursuing in 2021? We want to know? Share in the comments below.
Sources:
McKinsey & Company: The next normal arrives: Trends that Will Define 2021 — and beyond. By Kevin Sneader and Shubham Singhal
PIWorld: “How AI is Revolutionizing the Print Industry” by Piragrath Mahalingam of StickerYou
Deloitte: COVID-19: Workforce Strategies for Post-COVID Recovery
Forrester: Predictions 2021: Technology and Customer Obsession Help Firms Emerge from Crisis Mode, by Sharyn Leaver
Digital Labels and Packaging Magazine: Trends and Predictions for 2021
Accupac: Sustainability Trends to Watch for in 2021
Coresight Research: Unified Commerce for the Channel-Agnostic Customer
Keypoint Intelligence: Top Three Workflow Trends in Production Printing for 2021
Keypoint Intelligence: Pandemic Presents Opportunity to Improve Sustainability
Conference Board Press Release: Consumers Attitudes about Data Practices
APTech Leading Print Magazine: “What the Hell Do we Do Now? Advice for Weary Professionals,” by Michael J. Pallerino.
Not sure what your best option is for 2021? Call me and let’s talk. (561) 543-2323